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Gov’t can’t bid allocation for renewable energy

By: - Reporter / @amyremoINQ
/ 08:33 PM September 23, 2011

The Department of Energy will not be able to bid out to developers the limited installation allotments of 760 megawatts for renewable energy sources as it lacks the authority to do so.

Energy Secretary Jose Rene D. Almendras pointed out that the Renewable Energy law did not “specify a bidding process and so the only thing available to us is an eligibility criteria.”

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As such, the DOE is constrained to pursue a bidding despite the increasing clamor from renewable energy developers and business groups to do so. These groups have earlier claimed that a bidding could help lower the feed-in-tariff rates that would be granted for each renewable energy source and, consequently, lower the universal levy called feed-in-tariff allowance that would be collected from all power consumers.

The clamor to conduct a bidding also stemmed from the fact that the DOE has allowed developers to put up renewable energy facilities that could generate a total of only 760 MW over the next three years. Of this capacity, only 50 MW in new installations would be allowed for solar facilities, 200 MW for wind, 10 MW for ocean, 250 MW for hydro and 250 MW for biomass.

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The division might prove to be difficult as the approved renewable energy service contracts as of June 7 showed that potential projects could generate an estimated 2,823 MW—not to mention that there were also close to 400 service contract applications whose approval remained pending to date.

Almendras himself admitted the lack of a provision for a bidding process would pose problems for the department because many of the RE developers would be eligible to put up their respective facilities, based on the existing guidelines.

As such, the DOE will seek an opinion from Congress or from the Joint Congressional Power Commission (JCPC) because the move to conduct a bidding might require an amendment of the existing laws.

“Unfortunately there is a law. Unless the law is amended and changed, the department is obliged to conduct what is written. We’re trying to do things the best we can, while making sure that the interest of the people is protected,” Almendras explained.

The energy chief noted, however, that the DOE might have to wait for the Energy Regulatory Commission to issue the final feed-in-tariff rates before it could start consulting with the lawmakers as he floated the idea that “maybe, once the FIT has been finalized, not too many developers would be interested to pursue their projects, so there will be no need to go through that process.”

But in case the FIT rates would be lucrative enough to attract investors, then the DOE could move fast to ensure that the qualified developers would be able to push through with their proposed RE projects, Almendras assured.

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