A PRIVATE power utility in Cagayan de Oro plans to expand its solar facility to four megawatts (MW) from just 1 MW in the next two years.

“We intend to go 4 MW by 2012 and then add 1 MW more after that,” David A. Tuvali, senior vice-president of Cagayan Electric Power and Light Co., Inc. (Cepalco), said.

Cepalco’s 950-kilowatt (kW) photovoltaic solar power plant is the first and only such commercial facility in the country. The plant is located in Brgy. Indahag, Cagayan de Oro.

Mr. Tuvali said the utility may shoulder the full cost for the solar plant’s expansion, which may reach $24 million.

“This one (expansion) will have to be entirely [funded by the] private sector, meaning we will have to source from Cepalco and foreign partners,” Mr. Tuvali said.

“We have not secured financing as we are still awaiting approval for the RPS (renewable portfolio standard) and the FIT (feed-in tariff) however,” Mr. Tuvali added.

The feed-in tariff system guarantees a fixed price of power to be purchased from renewable energy sources over a period of time. It aims to guarantee a stable premium on renewable power to encourage investors who would otherwise prefer conventional fossil fuel-based plants.

The renewable portfolio standard, meanwhile, will set standards for utilities in determining how much power should be obtained from renewable energy sources like biomass, geothermal, solar, hydro, and wind.

The National Renewable Energy Board must come out with rules on feed-in tariffs and the renewable portfolio standard upon consultation with the Department of Energy and the Energy Regulatory Commission.

The utility’s solar plant occupies two hectares of land and is a “fuel-less” electric-generating plant, as light from the sun generates the electricity.

The solar plant also does not generate any kind of noise, unlike conventional fossil fuel plants, since there are no moving parts.

It also does not need large storage batteries since the power generated by the plant is fed directly to the distribution system.

The plant is connected to the existing distribution lines of Cepalco.

Cepalco also operates the 7-MW Bubunawan hydropower plant in Bukidnon.

With an aggregate installed capacity of 26,850 kW, Cepalco is providing the equivalent of 1.55% of the Mindanao grid and 0.19% in the national grid.

The utility, the third-largest in the country, has about 100,000 customers in the residential, commercial and industrial segments within its franchise area that covers Cagayan de Oro and parts of Misamis Oriental.

The Renewable Energy Act of 2008 also offers fiscal incentives such as income tax holiday for the first seven years of operation, tax-free carbon credits from renewable energy projects, and tariff exemption and duty-free importation of machinery and equipment for the first 10 years of operation.

Power from renewable energy sources are exempt from value-added tax.

The Philippines is considered as the world’s second-largest geothermal energy producer and the largest wind energy developer in the Southeast Asian region. — Jose Bimbo F. Santos

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