ERC turns down green energy pricing proposed by DOE’s draft circular

The Energy Regulatory Commission rejected the green energy rates contained in a draft circular prepared by the Department of Energy, an official said over the weekend.

“We will have to do our own study, so we can determine the applicable rates,” ERC renewable energy division chief Sharon Montañer said.

The green energy pricing program proposed by the DOE aims to establish the stable and right pricing for renewable energy such as solar, wind, biomass and run-of-river technologies.  It also seeks to attract more investors and promote competition in the green energy sector.

Montañer, however, said the DOE proposed green energy rates using the digressed feed-in tariff rates as cap.

“The FIT rate where the digressed rates are anchored is based on 2012 which is still high,”  she said.

The ERC official said any decrease in the cost of technology would not be taken into account in the digressed FIT rates and there were only digressed rates for run-of-river and biomass technologies.

“We never had digressed rates for solar and wind.  We only have round two rates. For the rest of technologies like geothermal and large hydro, there are no FIT rates so there is no anchor,” she said.

Montañer said the ERC would submit its position paper to the draft circular governing the GEPP,  which includes contracting for supply from qualified renewable energy projects under a competitive process.

The DOE wants to auction around 2,000 MW of renewable energy capacity under the GEPP to spur renewed interest in RE. The department is conducting consultations on the draft GEPP rules.

Under the draft circular, RE developers can offer to supply a specified volume of electricity generated by their facilities at prices pursuant to GEPP.

The circular aims to facilitate contracting, on a voluntary basis, by qualified RE projects through a competitive process or auction called the green energy auction.

Qualified suppliers can offer to supply a specific volume of electricity generated by their facilities to be covered by green power supply agreements at prices under the GEPP.  The auction will be conducted through an electronic bidding.

The DOE said the circular would assist RE participants in their compliance with the renewable energy portfolio standards.  It said this would also mitigate market exposure and risks related to RE projects and address price volatility in the procurement of RE certificates.

“Based on the instructions of the secretary, the main objective is to promote more investments in the RE sector considering that it won’t have feed-in tariffs and another round of feed-in tariffs anymore so it’s  really to attract more investments and the idea is to create a market for them to facilitate their access to market for the renewable energy,” National Renewable Energy Board chairman Monalisa Dimalanta said.

Dimalanta said a price would be set under which interested generators could offer their capacity, “and then we will allocate that to the other distribution facilities who are required to purchase RE because of their RPS mandate.”

Topics: Energy Regulatory Commission , ERC , green energy , Department of Energy , DOE
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