The Philippines launched a renewable energy market (REM), which would pave the way for increasing the utilization of renewable energy and transition to cleaner sources of electricity.
In a statement, the Philippine Electricity Market Corp. (PEMC) said the REM interim commercial operations will commence on Aug. 26.
The launch came following the promulgation of Department Circular No. DC2022-06-0019 by the Department of Energy (DOE), which outlined the activities and governing rules of the market’s interim operations.
The REM serves as the venue for buying and selling RE certificates (RECs), a market-based instrument that represents the property rights and other nonpower attributes of generating nonconventional energy resources.
“The REM will incentivize the harnessing of our wealth of natural resources, bringing in additional, more sustainable sources of electricity. We welcome this diversification that will safeguard our energy supply security,” said PEMC president Leonido Pulido III.
PEMC, as the designated market registrar, shall issue one RE certificate for every megawatt-hour of actual generation from eligible renewable sources to participants.
Renewable Portfolio Standards
The same certification will be used in compliance with the Renewable Portfolio Standards, a policy that requires industry players to source a portion of electricity from RE sources.
During the interim period, market participants are expected to actively participate in the activities related to the validation and confirmation of the RECs they receive.
“REM participants are also highly encouraged to attend market-related [training] and events that impart knowledge on relevant updates in addition to REM fundamentals and market processes,” it said.
PEMC head of corporate planning and communications Clares Loren Jalocon said no trading of RECs and financial transactions will take place yet pending the Energy Regulatory Commission’s (ERC) approval of the price cap.
Aside from that, the ERC is tasked to promulgate the rules on the recovery mechanism for the cost of the RPS compliance by regulated entities, as well as the structure and level of market transaction fees for the REM.
REM participants
Jalocon reported the REM expected participants as of July reached 281, with 98 percent of them having lodged their application with PEMC signifying their interest to participate.
“The pandemic notwithstanding, the overwhelming response to the REM has been beyond anything we expected,” added Jalocon.
Since the registration process started in early 2020, PEMC said it has processed and approved about 96 percent of the applications upon the completion of all the requirements.
All registered participants are granted access to the Philippine Renewable Energy Market System, which performs the major market processes such as registration; REC calculation, issuance and transfer and reportorial requirements to the DOE on RPS compliances.
“More than the numbers that will correspond to the compliance with the RPS, the RE market paves the way for the transition to cleaner energy that leads to more benefits to the consumers, their families, the nation and ultimately, the environment,” said Pulido.