Chevening Chat Series 4: REsolutions: Renewable Energy (RE ...
Transcript of Chevening Chat Series 4: REsolutions: Renewable Energy (RE ...
Chevening Chat Series 4: REsolutions: Renewable
Energy (RE) for Sustainable and Inclusive Development
20 January 2017; 1:00 PM - 5:00 PM at SEDA Hotel BGC
1Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
incentive mechanism in the renewable energy
sectorby: Atty. Deborah Anastacia Layugan
Market Operations Service Energy Regulation Commission; Chevening 2007-2008
2Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
DISCLAIMERThe slides in this presentation were prepared as talking points. It is possible that key substantive elements were delivered orally during presentation and are not present on the slides. Questions regarding content should be directed to the author. Moreover, the views expressed in presentations made at Chevening Chats Series or other CAFPI events are those of the speaker and not, necessarily, of CAFPI or its partner organizations. Presentations at CAFPI events, or the presence of organizations at CAFPI events, does not constitute an endorsement of the organization or speaker's views, products or services.
INCENTIVE MECHANISMS IN THE RENEWABLE ENERGY SECTOR Forum on “RESolutions: Renewable Energy Solutions for
Sustainable and Inclusive Development”
Debora Anastacia T. Layugan Market Operations Service
Energy Regulatory Commission
3Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
RE Law IncentivesFiscal Incentives:
✓ Income tax holiday ✓ Duty-free
importation ✓ Special realty tax
rates ✓ Corporate tax rate
after ITH ✓ Accelerated
depreciation ✓ Zero VAT
Non- Fiscal Incentives:
ON-GRID ✓ Renewable Portfolio
Standards ✓ Feed-in Tariff ✓ Renewable Energy Market ✓ Green Energy Option ✓ Net-metering Program
OFF-GRID ✓ Min. RE generation ✓ Cash incentives
4Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Features of Feed-in Tariff Mechanism
Based on cost of a representative project
Technology-specific
20-year duration
Subject to degression and adjustments
Subject to review
5Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Approved Feed-in Tariffs (FITs)
RE Technology Feed-In-Tariff (FIT) Rates (PhP/kWh)
Installation Targets (MW)
SOLAR 1 9.6800 50
SOLAR 2 8.6900 500
WIND 1 8.5300 200WIND 2 7.4000 400BIO-MASS 6.6300 250ROR HYDRO 5.9000 250
6Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
The Overall FIT Framework
TransCoFIT-ALL
7Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
The FIT-All Collected from Consumers
• Uniform ₱/kwh charge • Payable by all electricity users • Periodically calculated and set • Based on forecasted RE deliveries • Proceeds go to a fund administered by Transco
from where the RE payments will be sourced
TRANSCO ERC FIT-ALL
8Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Particular PhP/kWh Remarks
FIT-ALL for CY’s 2014 and 2015 0.0406
ERC Case No. 2014-109 RC Decision dated 29 September 2015
FIT-ALL CY 2016 0.1240Provisional Authority ERC Case No. 2015-216 RC, Order dated 16 February 2016
FIT-ALL CY 2017 (New Application) 0.2291
ERC Case No. 2016-192 RC filed on 01 December 2016
Approved & Proposed Feed-In Tariff Allowance (FIT-All)
9Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
RE Technology
Installation Target (MW)
Subscribed Capacity (MW)*
Balance (MW)
No. of RE Plants*
Solar 500.00 525.95 -- 24
Wind 400.00 393.90 6.10 7
Biomass 250.00 155.60 94.40 10
ROR HYDRO 250.00 28.70 221.30 4* Based on Certificates of Endorsement (COEs) issued by the DOE as of 09 January 2017
Approved Installation Target & Level of Subscription
10Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Net Metering for RE
DUs to enter into Net-Metering agreements with qualified end-users
ERC and NREB to develop interconnection standards and pricing methodology and
other commercial arrangements
Net metering Rules promulgated
11Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Scope, Applicability & Qualification
• Applicable to on-grid systems. • Only for installation of < 100kW. • For eligible RE Technologies such as wind, solar, biomass or
biogas or other RE systems capable of being installed in the QE’s premises.
• End-user should be in good credit standing in the payment of electric bills to the DU.
• The RE System must be compliant with the standards set in the PEC, PDC, DSOAR and the Net-Metering Interconnection Standards.
12Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Interconnection Set-Up
Either 2 uni-directional meters or one bi-directional meter. Third meter may also be installed to measure total RE generation.
Import Meter (delivered energy)
Export Meter (received energy)
REC Meter
13Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Pricing MethodologyP5.6580
Generation Transmission Distribution End-User
P5.6580 P1.1839
SL: P0.4723 DSM: P1.9112 Subs: P0.1093 Tax: P0.9046 UC: P0.1188
P11.1106/kWh+ =+
14Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
NET-METERING CUSTOMERS
GRID No. of Qualified End-Users*
Capacity (MWp)
Luzon 612 2.6938
Visayas 30 0.0966
Mindanao 1 0.0107
Total 643 2.8011
* As of 31 December 2016
15Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Other On-grid Incentive Mechanisms
Renewable Portfolio Standards
Green Energy Option
Renewable Energy Market
16Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Renewable Energy Investments
17Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Scaling up of Variable Renewable Energy
18Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
POLICY FRAMEWORK
• Removal of the first-commissioned, first –entitled policy
• Shift from cost-based Feed-in Tariff to auction type mechanism
• Subsidy for the payment of FIT-allowance • Implementation of Renewable Portfolio
Standards and Renewable Energy Market
19Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
ChallengesNew industry, learning curve
Preparedness of stakeholders
Penetration management vis-à-vis capacity and pricing
Limited resources and capacity
Legislative nature of approval process
Scarce information dissemination activities
20Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
THANK YOU!
www.erc.gov.ph21
Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
Chevening Chat Series 4: REsolutions: Renewable
Energy (RE) for Sustainable and Inclusive Development
20 January 2017; 1:00 PM - 5:00 PM at SEDA Hotel BGC
22Incentive Mechanism in the Renewable Energy Sector by Atty. Deborah Layugan. RESolutions: Renewable Energy (RE) for Sustainable and Inclusive Development: 01/20/2017
DISCLAIMERThe slides in this presentation were prepared as talking points. It is possible that key substantive elements were delivered orally during presentation and are not present on the slides. Questions regarding content should be directed to the author. Moreover, the views expressed in presentations made at Chevening Chats Series or other CAFPI events are those of the speaker and not, necessarily, of CAFPI or its partner organizations. Presentations at CAFPI events, or the presence of organizations at CAFPI events, does not constitute an endorsement of the organization or speaker's views, products or services.