The Energy Regulatory Commission said Thursday it approved a feed-in tariff rate of P7.40 per kilowatt-hour for new wind power projects with a combined capacity of 400 megawatts.
The new rate, which will be applied to new wind power projects, is lower by P1.13 per kWh than the P8.53 per kWh enjoyed by the first batch of wind projects and the P7.93 per kWh rate endorsed by the National Renewable Energy Board.
“We already approved wind FIT2 of P7.40 [per kWh] during our Oct. 6 commission meeting. It’s still being routed to the members of the commission for our signature,” ERC chairman Jose Vicente Salazar said.
Salazar said the NREB applied for a feed-in tariff rate of P7.93 per kWh.
ERC earlier approved a feed-in tariff rate of P8.53 per kWh for the first 200 MW of wind projects that qualified under the first wave of installation targets.
The Energy Department then increased the installation target to 400 MW, amid strong investor interest.
“Yes, it’s lower by more than P1. The application was P7.93, as recommended by NREB but we adjusted the recommended amount on the basis of several factors, such as WACC [weighted average capital cost], IRR [internal rate of return], capacity factor, etc,” Salazar said.
ERC asked NREB to submit the engineering, procurement and construction costs for three wind projects as part of ongoing evaluation on the pending feed-in tariff application for the additional wind installation target.
The additional installation target for wind is expected to benefit the completed projects of Trans-Asia Oil and Energy Development Corp.’s 54-MW wind project in Guimaras; Alternergy Wind One Corp.’s 54-MW wind project in Pilillia, Rizal; and PetroEnergy Resources Corp.’s 36-MW Aklan wind project.
Several wind projects are also in various stages of development, including the 50-MW Mt. Redondo wind power project of Pan Energy Corp. in Subic, Zambales; the 70-MW Bernacci Mountain wind power project of Cornerstone Energy Development Corp. in Libmanan, Camarines Sur; the 25-MW Malay wind project of Tri-Conti Elements Corp. in Nabas, Aklan; and the 45-MW Tanjay wind power project of Constellation Energy Corp. in Negros Oriental.
Energy director Mario Marasigan earlier said the developers could still proceed with project construction even without the feed-in tariff rate for wind projects.
“The FIT system is just one market options,” he said.
Marasigan, however, confirmed that proceeding with the projects without the FIT rate would be a risk on the part of the investors.