The Department of Energy (DOE) has to wait for the Renewable Energy (RE) market to mature—before it offers the Feed-in-Tariff (FIT) through bidding, according to German Prof. Christoph Menke.
“The market has to be ready for an auction, it might result in higher costs . . . and end up with a few players,” Menke said in a forum on Thursday during the 10th International Exhibition and Conference on Energy, Power and Electrical Technologies at the SMX Convention Center in SM Mall of Asia in Pasay City.
The FIT, an incentive mechanism for RE power plants, is currently won through a race that is complied with through reaching the deadline set for commercial operations.
Menke added the Philippines has to enter the RE learning phase first in five to 10 years before auctioning the capacities, which will make power generation cheaper than the current FIT rates.
He further noted Germany went through the phase in 12 years.
The Trier University professor, however, suggested that the Philippines could decrease the rates through reducing soft costs by streamlining the licenses and permits.
He cited America could offer solar and wind generation at lower rates due to the streamlined process.
Menke also stressed Philippine RE projects have a higher risk for capital compared to the other countries, due to the longer processing of the required documents.
The bidding process for the FIT was earlier bared and planned by former Energy Secretary Carlos Jericho Petilla.