ERC Denies Proposed FIT Rate for Ocean Energy Resources
The Energy Regulatory Commission (ERC), in an Order it recently issued, denied the petition filed by the National Renewable Energy Board (NREB) for Feed-in-Tariff for electricity generated from Ocean Energy Resources. Consequently, NREB was directed to file a separate petition for a new Ocean FIT rate based on Tidal In-stream Energy Conversion Technology which is the predominant Ocean Technology in the country.“Majority of ocean power projects awarded with service contracts by the Department of Energy (DOE) uses Tidal In-stream Energy Conversion. The Commission, therefore, found it reasonable to use the said technology, instead of the Ocean Thermal Energy Conversion (OTEC), as the representative project for the determination of the FIT rate for Ocean Technology, pursuant to Section 5 of the FIT Rules,”
ERC Chairperson and CEO Agnes VST Devanadera explained.
The ERC recognized that there is more information available on the tidal in-stream energy conversion technology which can be the basis for the calculation of the initial FIT for Ocean Energy, instead of OTEC whose operations have not yet reached commercial scale.
The ERC previously deferred the approval of the FIT for Ocean technology when it issued its Decision on the FIT rates in 2012 because NREB proposed an OTEC as the representative project and there was no OTEC plant in commercial operation yet at that time, and only a handful of pilot projects have been launched in the world. Because of this, the basis for the cost of putting up OTEC plants are mere pilot projects which are on a high scale. Thus, the ERC only approved the FIT rates for Wind, Solar, Biomass, and Run-of-River technologies, pending commercialization of OTEC.
Further, the ERC in its Order emphasized that the OTEC technology, up to present, remains short of commercial deployment. “The Commission deemed it prudent to evaluate and determine the reasonable levels of FIT on the basis of information that are relevant in the context of Ocean technology developments in the country and in other jurisdictions. The said considerations are vital particularly in view of the fact that the FIT are costs that are ultimately passed on to the consumers.”
ERC Chair Devanadera added.