MANILA -The Energy Regulatory Commission may remove the price caps for the Department of Energy’s third Green Energy Auction Program (GEA-3) scheduled for next month, as stakeholders noted that reserve prices issued during the second round held in July were “too low,” resulting in a low turnout.
ERC Chair Monalisa Dimalanta told reporters on Tuesday that this was one of the concerns her office was discussing with the DOE in relation to GEA-3, which will auction off geothermal and pumped-storage hydropower capacities.
“We’re studying if it’s possible not to put a reserve price then we’ll just evaluate after the bids are submitted. We’re still evaluating,” Dimalanta said.
READ: Renewable energy firms shun DOE’s green power auction
This process will require the ERC to review the offer prices after the GEA-3 is conducted. This may allow investors to offer renewable energy technology at higher prices, although it will be up to the regulator to approve or deny the offers.
To recall, the DOE auctioned off 11,600 megawatts (MW) of capacity in the second GEA, but received only 3,580.76 MW of committed capacities.
GEAR prices deemed too low
Among the most pressing concerns raised by bidders were the low Green Energy Auction Reserve (GEAR) prices set by the ERC that ranged from P4.4043 per kilowatt-hour (kWh) to P6.2683 per kWh.
Asked whether removing the GEAR prices would be more enticing for the private sector, Dimalanta said the ERC was still in the process of conducting focus group discussions with investors.
“We’re still weighing it out. Maybe we need to check with banks what would be more palatable to the banking industry because they’ll be the ones to finance all these projects,” Dimalanta said, adding that they would come up with a decision within the month.