Gov’t moves to create renewable energy market

The Philippine government has started laying the groundwork for the creation of a renewable energy market (REM), a move that is expected to further boost investments in the local clean energy industry.

At the sidelines of the Renewable Energy Markets conference in San Francisco, Josue B. Balacuit, OIC-chief science research specialist at the Department of Energy’s (DoE) Bureau of Electric Power Industry Management, said the rules for the creation of the REM might be issued and promulgated within the first quarter of 2012.

The DoE has engaged a consultant under the auspices of USAid [US Agency for International Development] for this. “We’re just awaiting the release of the inception report, which will include the features of the REM,” Balacuit said.

The REM will serve as a venue for the issuance, monitoring and, possibly, the trading of renewable energy certificates (RECs) which, in turn, will serve as proof of the energy companies’ compliance with the Renewable Portfolio Standards (RPS).

The RPS is a mechanism provided under the Renewable Energy Act of 2008, which requires electricity suppliers/power distributors to source a portion of their electricity requirements from RE sources.

Based on the draft rules, the purpose of the RPS was “to contribute to the growth of the renewable energy industry by diversifying energy supply, spur socio-economic development in rural areas, and help address environmental concerns of the country by reducing harmful emissions.”

According to Balacuit, the REM should be established by the DoE while the Philippine Electricity Market Corp. should establish the renewable energy registry that will monitor the RE certificates.

It is now being studied whether these RE certificates will have a value and can be traded to allow RE developers to have additional revenue stream for any capacity that will not be contracted under bilateral contracts, he said.

Balacuit said the bureau was looking at the models used in the United States, after which the design and framework for REM and RE certificates might be patterned.

He, however, admitted that the plan might have an impact on consumers.