The Energy Regulatory Commission (ERC) gave the 150-megawatt (MW) wind farm of Energy Development Corp. (EDC) the benefit of receiving incentives under the feed-in tariff (FIT) system.
The regulator approved the application of the 150-MW Burgos Wind Project for a Certificate of Compliance (COC) on February 9, 2015, EDC said in a disclosure to the Philippine Stock Exchange Friday.
“The transparent and predictable regulatory regime we have in the Philippines should encourage more players to pursue much needed renewable energy (RE) investments in the country,” EDC president and COO Richard Tantoco said in a statement.
Last December 18, the ERC granted the wind farm a Provisional Authority to Operate after the Department of Energy (DOE) endorsed it in November as an eligible RE project.
In line with the Renewable Energy Act of 2008, the ERC gives payments on a guaranteed fixed rate per kilowatt-hour – the FIT rates – for power producers harnessing renewable energy under the FIT system.
In a research note, First Metro Securities Research said the ERC approval allows EDC to sell electricity from the Burgos wind farm at the FIT rate of P8.53 per kilowatt hour (kWh) for 20 years.
“This is positive development for EDC as it assures the company of additional steady stream of cash flows from its $450-million investment,” it noted.
The project – the largest in the Philippines and in Southeast Asia — gives the Luzon grid a 150-MW boost that could help address the looming power shortage in Luzon and in the Visayas, Tantoco said.
“Few people know that our country is built on an island-arc setting characterized by volcanism, and in such settings we will not have large reserves of oil, natural gas and coal. We badly need RE to help us become less reliant on volatile imports,” he noted.
Apart from being EDC’s first foray into the wind energy business, the Burgos Wind Project is also its single largest investment to date.
The company invested $450 million in the project, including $315 million in project financing with leading international and local banks led by EKF – Denmark’s export credit agency.