Renewables cut power costs by P99B in two years
Renewable energy projects supported by the feed-in tariff allowance (FIT-All) provided about P99.2 billion in power savings in two years, according to a think tank.
Based on an analysis from the Institute for Climate and Sustainable Cities (ICSC), the savings logged were nearly half of the P220.5 billion consumers have paid through the FIT mechanism since it started in 2015.
The FIT-eligible projects helped ease upward price pressure in the country’s wholesale electricity spot market (WESM) for 2024 and 2025, bringing down electricity costs by P0.3916 per kilowatt-hour (kWh).
WESM is a platform where power is traded between producers and distributors to boost supply.
The savings recorded exceeded the recent hike in FIT-All, reaching P0.3359 per kWh. This increase, which began this month, was approved by the Energy Regulatory Commission.
FIT-All is a charge collected from on-grid Filipino power consumers to provide incentives to renewable energy producers.
“The sharp decline in renewable energy costs over the past decade shows that sustained policy support, when paired with competition, can turn emerging technologies into affordable and competitive sources of electricity,” said Pedro Maniego, ICSC’s senior policy advisor.
“The priority now is to build on these gains by expanding renewable energy, so more consumers can benefit from lower-cost electricity and reduced exposure to fuel-price volatility,” he added.
ICSC said the deployment of more renewable energy assets has led to more competitive pricing, with solar projects backed by the FIT program costing roughly P3 to P4 per kWh from P9.68 per kWh in 2014.
The green energy auction-allowance (GEA-All), through a series of bidding, has also helped keep solar energy prices in the range of P3.68 and P4.48 per kWh.
“Renewable energy can reduce electricity prices beyond the projects directly supported by FIT-All and GEA-All. Because solar and wind are often generated during periods of high electricity demand, they can displace more expensive power plants and lower prices in the WESM,” ICSC said.
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