Rules for DOE’s renewable energy auction set

The Department of Energy (DOE) has released the terms of reference for auctioning off 2,000 megawatts of renewable energy (RE).

Under the guidelines, renewable capacities to be offered are broken down as follows: 1,400 MW for Luzon, 400 MW for the Visayas and 200 MW in Mindanao.

For Luzon, the agency is seeking suppliers for 900 MW of solar, 360 MW of wind, 80 MW of hydro and 60 MW of biomass.

The target capacity for the Visayas is 260 MW of solar, 120 MW of biomass and 20 MW of wind.

Meanwhile, in Mindanao, the capacity requirement is 100 MW of solar, and 50 MW each of hydro and biomass.

Supply contracts shall not exceed 20 years, with the commencement date targeted between Dec. 26, 2022, and Dec. 25, 2025.

The RE plant must be qualified under renewable portfolio standards, a market-based mechanism that mandates industry players to source a portion of electricity from eligible renewable facilities.

The DOE will hold a prebid conference virtually, providing an avenue for qualified bidders to raise questions or clarifications on the guidelines.

Subsequently, a bid bulletin will be released two days after the prebid conference should the questions or clarifications result in the amendment or modification of the bidding rules.

The bidding process will be done through an electronic bidding platform. Each participant will be given a user-specific ID to access the digital platform and place a bid.

Proposals shall include the following: capacity (in MW), price (in peso cost per kilowatt hour) and supply delivery commencement date. Bids higher than the set green energy auction reserve price will automatically be discarded.

The Energy Regulatory Commission is yet to release the final auction prices. But the initial reserve price for solar is P3.6248 per kWh; wind, P5.2887 per kWh; biomass, P5.5480 per kWh and run-of-river hydro, P5.8705 per kWh.

All offers will be evaluated immediately following the closure of submission of bids. Winning bidders will be notified and posted on the DOE website.

Interested suppliers shall submit their registration form and letter of intent to the department via email. They will be allowed to make an offer upon the submission of the bid bond and the execution of affidavit of undertaking.

The registration period will last for 10 calendar days, which shall begin upon posting of the terms of reference on the DOE’s website. Late registration or applicants with incomplete documents will not be entertained.

The DOE introduced the green energy auction program to further accelerate the country’s energy transition and meet its RE goals.

The scheme is a new market development support program introduced by the DOE to promote RE as one of the country’s primary sources of energy through the transparent and competitive selection of facilities.

This supports the government’s goal of attaining energy security through the entry of new capacities into the grid.

The government is targeting a 35-percent renewable share in the energy mix by 2030 and a 50-percent RE share by 2040. INQ