RE developers returning contracts

Development of the country’s renewable energy (RE) resources have hit a road block since the bulk of investors have found that their service contract (SC) areas not viable for power generation.

Jay Layug, Energy undersecretary, said that majority of the 60 RE contracts they have called to notice for meeting the required two-year feasibility study before further development have been shelved by their proponents.

“Based on their wind mass data as an example, walang [there is no] wind or yung [the] of river di malakas [is not strong enough],” he said. The Energy department has awarded 227 SCs to investors since the passage of the Renewable Energy Act of 2008, which granted incentives to proponents of green power sources.

Of this number, the 60 contracts the Department of Energy (DOE) official mentioned completed pre-development studies. Despite majority of these contracts being waived by their proponents, the DOE is confident of the government’s RE contracting regulations.

It would be recalled that the Asian Development Bank offered to help the government map the country’s wind resource, which the US National Renewable Energy Laboratory estimated could go beyond 76,000 megawatts (MW) of potential generating capacity.

“But that is precisely the reason behind the [SC], which is they [investors] should conduct their feasibility study,” Layug said.

Besides the earlier RE contracts approved by the DOE, there are 222 pending applications for SC still awaiting the green light. These include hydro, wind, biomass, ocean and geothermal projects.

Layug earlier said that “our target will be 10 to 15 [SCs] approvals every month.”

These projects, should they mature into the commercial phase, have a potential to generate 6,047 MW of electricity. As with the other REs, however, proponents would have to undertake pre-development studies. –EUAN PAULO C. AÑONUEVO REPORTER, Manila Times