Renewable energy firms shun DOE’s green power auction

INQUIRER FILE PHOTO

MANILA, Philippines — Low price caps for the Department of Energy’s (DOE) second round of competitive bidding for renewable energy (RE) capacities may have discouraged power developers from participating in the program this year, resulting in a low turnout.

Industry sources told the Inquirer on Monday that bidders in this year’s Green Energy Auction Program (GEA-2) found the price caps set by the Energy Regulatory Commission (ERC) “too low,” with the DOE receiving only 3,580.76 megawatts (MW) of committed capacities that must be available in the next three years.

This is far below the 11,600 MW that the DOE auctioned off in the program, leaving around 70 percent of the total, or 8,000 MW, unsubscribed.

GEA-2 is crucial in achieving the DOE’s goal of increasing the share of renewables in the country’s energy mix from the current 21 percent to 35 percent by 2030 and 50 percent by 2040.

The ERC issued the final Green Energy Auction Reserve (GEAR) prices for GEA-2 on June 15, with price caps ranging from P4.4043 per kilowatt-hour (kWh) to P6.2683 per kWh, after developers clamored for increases due to high development costs.

READ: ERC sets ceiling prices for green energy auction

Higher solar rates

For one, the Philippine Solar and Storage Energy Alliance had called on the ERC to raise the GEAR price for floating solar, saying that the project cost for this particular technology was 20-percent higher than ground-mounted solar.

The final GEAR prices were already higher than the ERC’s preliminary caps released in May, which were between P4.2395 per kWh and P5.9823 per kWh.

READ: ERC OK for higher floating solar plant fees sought

Monalisa Dimalanta, Chair of the ERC, previously told reporters that the commission adjusted the rates based on stakeholder feedback from a series of public consultations held across the country.

According to the DOE, a total of 1,968.89 MW was committed for the construction of ground-mounted solar projects that must be completed from 2024 to 2026; 9.39 MW of rooftop solar from 2024 to 2025; 90 MW of floating solar for 2026; and 1,512.38 MW of onshore wind from 2025 to 2026.

The DOE received no commitments for the development of biomass and waste-to-energy projects, which had 230 MW and 30 MW available for bidding, respectively.

The DOE said it was in talks with participants for the next steps.

“We will review [the GEA process] and we will also have discussions with the auction participants,” Energy Undersecretary Rowena Guevara said of the low turnout.

The DOE noted that it would post the list of winning bidders on its official website by July 12, and that notices of award would be released on the same day.

Certificates of award will be issued once the winning bidders submitted post-auction requirements, including performance bond, and a GEA-2 affidavit of undertaking to deliver the committed capacities, according to the DOE.

A total of 118 companies qualified for the GEA-2, with the DOE earlier anticipating 339 potential bids.
Last year, the DOE declared a successful first round of the program after awarding around 2,000 MW in renewable energy capacities to 19 winning bidders.