The Energy Regulatory Commission (ERC) has approved a feed-in-tariff (FIT) rate of P7.40 per kilowatt hour (kWh) for the second round of wind power projects.
ERC chairman Jose Vicente Salazar said the board approved the new FIT rate for wind power at its meeting last October 6.
“We already approved wind FIT2 of P7.40 kWh during our October 6 commission meeting,” Salazar told reporters in a text message.
The feed-in-tariff scheme is an incentive given by the government to encourage the development of renewable energy projects.
Salazar said the approved rate is lower by P1.13 kWh from the P7.93 kWh proposed by the National Renewable Energy Board (NREB).
In justifying the reduction, Salazar said they considered some factors such as the weighted average cost of capital (WACC), capacity factor and internal rate of return (IRR).
“The application was P7.90 as recommended by NREB, but we adjusted the recommended amount on the basis of several factors, WACC, IRR, capacity factor, etc.,” said Salazar.
Salazar said they have issued the resolution on the new FIT rate which is now being routed to the members of the commission for signature.
The first FIT wave was pegged at P8.53 per kWh covering an initial 200 megawatts of wind capacity. The second FIT wave covers an additional 200 MW of wind power.
Salazar also confirmed that the three wind power projects that have already been completed and have been delivering capacity to the grid are covered by the new FIT rate.
These are the 54-MW San Lorenzo wind plant of Trans-Asia Renewable Energy Corp.; the 54-MW Pililla project of Alternergy Wind One Corp.; and the 36-MW first phase of the Nabas wind plant of PetroWind Energy, Inc.
With these, the total capacity for the second wave of wind power now stands at 144 MW. This means that only 56 MW of capacity is left for wind developers to avail of the second wave FIT incentive.