Hydropower developers are pushing for a higher feed-in tariff (FIT) rate and a more streamlined permitting process for run-of-river projects, citing operational and pre-operational complexities that slow development.
PhilHydro Association Inc. president and First Gen Corp. assistant vice president for business development group Gertrude Roque said during the opening day of the 3rd Philippine Hydro Summit and Exhibition 2025 that there is a need to “acknowledge the very real challenges” hindering hydropower development in the country.
Roque identified several significant barriers, including complex permitting, financing limitations, market ambiguities, lagging infrastructure and the necessity for genuine and lifetime trust-building with local communities.
“These bottlenecks threaten the pace at which we must move to secure our grid and meet our RE targets,” she said, calling for a “coordinated, whole-of-government and whole-of-industry effort, with firm timelines and shared accountability” to overcome them.
The Energy Regulatory Commission (ERC) proposed an FIT rate of around P6.38 per kilowatt-hour for the FIT-4 covering about 100 megawatts (MW) of run-of-river hydro, which is subject to consultations.
PhilHydro is seeking a “reasonable rate” to encourage more development, arguing that their efforts extend beyond just producing power to include taking care of the watershed and contributing infrastructure to the countryside.
PhilHydro formally proposed to the ERC that the actual average capacity factor (CF) be used in the computation of the FIT-4.
The group said the actual and historical capacity factors from operational plants better reflect the true conditions and challenges of operating run-of-river hydro in the Philippines.
These plants are significantly influenced by the availability of river water, site-specific issues, geological conditions, access problems and flooding, all of which affect the actual CF of a facility and are verifiable by regulators.
The group also proposed including a contingency cost in the rate, which they deem crucial due to the constant exposure of run-of-river hydro projects to weather cycles, climate change and natural disasters.
Department of Energy (DOE) Secretary Sharon Garin, in a speech delivered by Renewable Energy Management Bureau director Ruby de Guzman, acknowledged the critical role of hydropower in providing essential ancillary services and crucial firming capacity to keep the grid stable 24/7.
Garin echoed Roque’s concerns about the challenges, noting that “permitting challenges, financial hurdles, the need to earn genuine community trust and even the hydrogeological conditions of project sites often weigh heavily on our timelines.”
The DOE said it is actively addressing these issues by upholding commitments under the FIT and optimizing participation in the Green Energy Auction Program (GEAP) to attract investors.
