With the ending of feed-in-tariff (FIT) awarding last year, the Mindanao Development Authority through the inter-agency power monitoring body has recommended the extension the FIT program for hydro and biomass in Mindanao.
MinDA has put forward the recommendations through the Mindanao Power Monitoring Committee (MPMC), which it co-chairs with the Department of Energy.
This is also in support to the recent announcement of DOE on the possibility of FIT to be extended for three more years. According to MinDA Chairman Datu Abul Khayr Alonto, the agency has already submitted the recommendation in order to further encourage the entry of renewable sources in the Mindanao grid.
“We need to mitigate the anticipated electricity price spikes given that Mindanao’s power capacity will be primarily based on fossil fuels. This can significantly add up financial burden of the residential consumers,” Alonto said.
From about 58% in 2010, renewable energy (RE) capacity in Mindanao is down to 36% in 2017, and is expected to be dominated at 70 percent by fossil technology.
“This is part of the reasons why MinDA had been pushing for increased deployment of RE technology, in line with our long-term target of bringing energy mix back to the ideal energy mix by 2030,” Alonto said.
He however assured that there are more than enough natural resources for RE found geographically in Mindanao. Hydropower capacity tops Mindanao’s potential renewable energy source at 1,945 MW. Being the country’s food basket, the island-region also has a potential for Biomass Energy development, which is roughly around 146.65 MW potential capacity as of December 2016.
In the recommendation submitted by the National Renewable Energy Board, developers can fill the remaining allocation for biomass and run-of-river plants until 2020.
“We are requesting for five-year extension exclusively for Mindanao so that our developers will have enough time to catch-up and get the most out of the FIT allowance, considering that Mindanao has a unique challenge in a sense that we currently do not have a Wholesale Electricity Spot Market, yet,” said MinDA Deputy Executive Director Romeo Montenegro, who also sits as the TWG co-chairman of the MPMC.
In a data released by the committee, Mindanao only has a 3.6% share of the total FIT-All availment while Visayas and Luzon has 26% and 70.4%, respectively.
FIT is a government mechanism to entice renewable energy projects by providing fixed returns to developers for 20 years.