MANILA.-More investors have started to take interest in the country's solar resources as South Korean listed firm Youil Ensys disclosed plans to invest as much as $160 million, or about P7.2 billion, to put up two solar power plants in the Visayas. Through its local subsidiary Youil Renewable Energy Corp. (YREC), the company is looking at constructing a 30-megawatt solar-powered facility in Negros and another 10-MW power plant in Bohol. Scott Kim, chief executive officer of YREC, said at the sidelines of the Philippine Solar Power Association (PSPA) meeting that the planned Negros facility was expected to cost $120 million while the Bohol power plant would need $40 million.
The company has purchased a total of 90 hectares in the two provinces to house its planned solar facilities. However, Kim admitted that YREC would not proceed with the construction of the Negros facility unless the Philippine government issues the final feed-in tariff (FIT) rates for renewable energy, particularly for solar resources. Like most investors, the decision to push through with these projects will always hinge on the implementation of the feed-in tariff rates—an incentive most awaited by the whole renewable energy industry. The mechanism, provided under the Renewable Energy Act of 2008, will allow proponents to determine the economic and financial viability of their projects. Under the feed-in tariff system, developers are assured of future cash flow as electricity end-users will be charged fixed amounts to cover the production cost of energy from renewable sources. With this in place, utilities can spread the cost of clean power among customers.
The system is likewise expected to encourage investors to go into renewable energy development and production. The mechanism also ensures stable pricing for electricity from renewable sources. According to industry sources, solar FIT rates might range between P19 and P21 a kilowatt-hour, perceived to be the highest among other renewable energy sources like wind and hydro. Kim said that YREC was “willing to wait” for the Philippine government to issue the rates as the company was eager to put up the facilities here. “We already purchased the land so we have to wait, otherwise we have to resell our land,” he added. According to Kim, the planned buyer of the electricity to be generated from the two solar facilities might likely be National Grid Corporation of the Philippines, the private sector concessionaire that operates the power transmission system of the country. NGCP is usually allowed to contract power from generation companies for ancillary uses. Aside from the Philippines, Youil Ensys also has solar power projects in Korea, Malaysia, Thailand and Canada. The company's solar power projects accounted for 60 percent of its business while its mechanical engineering segment accounted for 40 percent.
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