Title
FIT Selection Guidelines for Renewable Energy
Law
Doe Department Circular No. Dc 2013-05-0009
Decision Date
May 28, 2013
The Department of Energy establishes guidelines for the selection and certification process of renewable energy projects eligible for the Feed-in Tariff System, ensuring compliance with installation targets and regulatory requirements to promote sustainable energy development.
renewable energy
feed
in tariff

Legal basis and policy intent

  • Section 7 of Republic Act No. 9513 requires the establishment of a feed-in tariff system (FIT System) for electricity produced from wind, solar, ocean, run-of-river hydropower, and biomass.
  • Section 5 of Department Circular No. DC2009-05-008 (Rules and Regulations Implementing Republic Act No. 9513) obligates electric power industry participants to source electricity from FIT-eligible RE generation at a guaranteed fixed price for a fixed period to be determined by the Energy Regulatory Commission (ERC).
  • The ERC adopted Resolution No. 16, Series of 2010 setting the FIT duration at twenty (20) years for eligible On-Grid RE plants.
  • The ERC, through Resolution No. 10, Series of 2012, approved FIT rates and equivalent degression rates (except Ocean, subject to installation targets) for the following:
    • Wind: 8.53 Php/kWh, degression 0.5% after 2 years from effectivity of FIT, installation target 200 MW.
    • Biomass: 6.63 Php/kWh, degression 0.5% after 2 years from effectivity of FIT, installation target 250 MW.
    • Solar: 9.68 Php/kWh, degression 6% after 1 year from effectivity of the FIT, installation target 50 MW.
    • Run-of-River Hydropower: 5.90 Php/kWh, degression 0.5% after 2 years from effectivity of FIT, installation target 250 MW.
  • The Circular is issued to complement the RESC Guidelines in the event the RE Developer applies for FIT eligibility.

Core definitions and key terms

  • “Certificate of Confirmation of Commerciality” means the certificate issued by the DOE confirming the Declaration of Commerciality by an RE Developer.
  • “Commercial Operation” means the phase when the RE Developer has completed commissioning and test operations and is ready to sell or apply produced energy, as duly confirmed by the DOE.
  • “Electromechanical Completion” means the whole plant (including all substation and other facilities for grid or distribution system connection) is in place but not yet connected, and the RE project is ready for commissioning.
  • “Declaration of Commerciality” means a written declaration by the RE Developer, duly confirmed by the DOE Secretary, stating that the project is commercially feasible.
  • “FIT System” means operation of an RE Plant under the approved FIT rate within the established installation target.
  • “Renewable Energy Service Contract (RESC)” means the service agreement between the Government through the DOE and an RE Developer granting exclusive rights over a particular RE area for exploration and development, divided into:
    • Pre-development stage; and
    • Development/Commercial stage, where preliminary assessment and feasibility study up to financial closing are part of Pre-Development, and construction and installation up to the operation phase are part of Development.
  • “RE Developer” means individual/s or a juridical entity created, registered and/or authorized to operate in the Philippines under existing Philippine laws, engaged in exploration, development or utilization of RE resources, and actual operation of RE systems/facilities.
  • “RE Operating Contract” means the service agreement between the Government through the DOE and an RE Developer for utilization of RE resources in the Development Stage, including actual operation of RE systems/facilities.
  • “Successful Commissioning” means physical connection to the Grid for a grid-connected project or connection to the Distribution Network for an embedded project, while delivering power to the transmission system.
  • “Work Plan” means the RE Developer’s five (5) year work commitments under the Development Stage, with corresponding cost estimate and specifying the date of commissioning and Commercial Operation, following Annex A’s template.

Pre-qualification and submission requirements

  • Only RE Developers with valid and subsisting RESCs may apply for eligibility and inclusion of their project under the FIT System.
  • For RESC conversion from Pre-Development Stage to Development Stage, the application must indicate that the Declaration of Commerciality is based on the approved FIT rate.
  • RESC holders under Development Stage, or those covered by an RE Operating Contract, may apply for FIT eligibility if they include in their submission a notarized proof and/or declaration that the project is not bound under any contract to supply generated energy to any Distribution Utility (DU) or consumer under Section 1.4 of the FIT Rules.
  • To issue a Certificate of Confirmation of Commerciality, the RE Developer must submit a Declaration of Commerciality based on the approved FIT rate and a Work Plan.

DOE evaluation and certificate of confirmation

  • The DOE must complete processing of the Declaration of Commerciality under the FIT System within thirty (30) working days from receipt.
  • The RE Developer is responsible for securing other regulatory requirements and permits connected to its obligations under the RE Guidelines and the provisions of the RESC, consistent with its Work Plan.
  • Projects that have complied with requirements for conversion from Pre-Development to Development under the FIT System are issued a Certificate of Confirmation of Commerciality.
  • The Certificate of Confirmation of Commerciality serves as notice to proceed to the construction phase under the Development Stage.
  • The DOE issues the Certificate of Confirmation of Commerciality to projects under Development Stage and to those covered by RE Operating Contracts intended for implementation under the FIT System.
  • After issuance of the Certificate of Confirmation of Commerciality, the DOE may issue an endorsement to the National Grid Corporation of the Philippines (NGCP) to support interconnection requirements such as Grid Impact Study and Interconnection Agreement, if applicable.

Electromechanical completion, site validation, and FIT endorsement

  • Upon attaining Electromechanical Completion, the RE Developer must inform the DOE.
  • Within fifteen (15) working days from receipt of such notice, the DOE conducts site validation and inspection, including the interconnection facility.
  • Electromechanical Completion is deemed attained if the construction phase is at least eighty percent (80%) completed, as determined from the RE Developer’s EPC contract or approved Work Plan construction and development timeline.
  • Not later than fifteen (15) working days from the last day of site validation, the DOE must issue confirmation or denial of Electromechanical Completion, including whether an interconnection facility exists.
  • If Electromechanical Completion is confirmed and the interconnection facility is fully in place, the DOE must, within five (5) days from confirmation, nominate the project’s FIT eligibility to the ERC for ERC processing of Certificate of Compliance (COC) under FIT System.
  • Nomination to the ERC under the above process does not by itself give a right to inclusion in FIT-eligible projects.
  • The RE Developer must inform the DOE of the date of Successful Commissioning, which the DOE validates.
  • If the DOE validates Successful Commissioning, it must issue a Certificate of Endorsement (COE) for FIT Eligibility to the ERC within fifteen (15) working days from the validation date.
  • The COE for FIT Eligibility is issued on a first-come-first-serve basis.
  • The DOE issues COE for FIT Eligibility until the maximum installation target per technology is fully subscribed.
  • The COE must state the installed capacity eligible for the FIT rate and the actual date of Commercial Operation.
  • Only RE Developers holding a Certificate of Confirmation of Commerciality may be issued a COE for FIT Eligibility.

Installation target subscription and next FIT regimes

  • When an installation target is fully subscribed based on issued COEs, the RE Developer must notify the DOE of its option, which may include:
    • Entering into a bilateral agreement with the DU or any off-taker; and
    • Exporting generated power directly to the Wholesale Electricity Spot Market (WESM), subject to the guidelines on “must-dispatch.”
  • After issuance of Certificate of Confirmation of Commerciality covering the cumulative installation target of a technology, the DOE, in coordination with the National Renewable Energy Board (NREB), initiates review of the next installation target.
  • A RE plant that operates under either option may receive COE for FIT Eligibility for the next succeeding regimes of the FIT System, subject to the FIT Rules.

Monitoring, posting, and website updates

  • The DOE maintains a monitoring board on its website showing the status of FIT Eligibility implementation.
  • The DOE updates the monitoring board weekly on:
    • Conversion of projects from Pre-Development to Development Stage; and/or
    • Issuance of Certificate of Confirmation of Commerciality under the FIT System; and
    • Subsequent issuance of COE for FIT eligibility.
  • The DOE conducts periodic site inspections of RE projects with Certificate of Confirmation of Commerciality and posts their status on the monitoring board monthly.

Non-retroactivity rule

  • The Circular does not apply to RE plants with approved tariff rates, or to RE plants with pending applications filed for approval by the ERC before the Circular’s effectivity.

Repeal, separability, and continuing force

  • The provisions of DC2009-07-011 and all DOE circulars, issuances, and declarations inconsistent with the present Circular are repealed accordingly.
  • All other provisions of existing DOE circulars, issuances, and declarations—and all parts not affected—remain in full force and effect.
  • If any provision is declared unconstitutional or invalid, the remaining parts stay in full force and effect.

Effectivity and operative timeline

  • The Circular takes effect immediately following publication in at least two (2) newspapers of general circulation.
  • The Circular remains effective until otherwise revoked.

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