THE Department of Energy (DoE) said on Wednesday that electricity rates would increase in the future due to the addition of new incentives for generation companies to hold more Green Energy Auctions (GEAs).
In an interview with reporters during an energy forum titled “Powering Progress: Accelerating Towards a Sustainable Energy Future,” Energy Undersecretary Rowena Guevara said the increase would be due to the participation of power plants with energy storage systems (ESS) in the GEA.
This will result in the possible increase of the Feed-In-Tariff Allowance (FIT-All) that is being passed to consumers by around P5.00 to P6.00 per kilowatt hour (kWh).
Energy Future,” Energy Undersecretary Rowena Guevara. Photo by: John Orven Verdote
“We know that adding an ESS to renewable energy plants is going to increase the price. It can go as high as around P5.00 per kWh to P6.00 per kWh,” Guevara said.
“You saw what happened to GEA-1 and GEA-2 and what it did to the prices. Now, you include ESS, and that will increase the price. But right now, we are trying to control that possibility,” she added.
The FIT-All is a tariff sourced from all electricity consumers to pay the premium for renewable energy (RE) projects that receive incentives from the government.
This rate can be adjusted yearly after evaluations, whether an increase or a decrease is needed.
In addition, both FIT and GEA were introduced by the government to entice the development of RE projects by providing rate incentives that will be funded via the FIT-All.
At present, Guevara said the DoE was still talking with its simulators regarding this matter and that it would hold public consultations in the future to discuss this matter.
“Right now, we are crunching the numbers together with the simulators in order to find some balance. We will also hold public consultations with the generation companies as the numbers should be feasible,” Guevara said.
The DoE confirmed in July that it would conduct another round of GEA in the 4th quarter of 2024, covering both integrated renewable energy and energy storage systems (IRESS) and possibly liquefied natural gas.
The IRESS is an energy solution that combines renewable energy technology with ESS and involves the integration of renewable energy sources with energy storage technologies like batteries and flywheel or pumped storage hydropower systems.
Be the first to comment