DoE to bid out 50 small hydro sites in 3rd quarter

The Department of Energy (DoE) is bidding out by the third quarter this year as many as 50 new and untapped potential run-of-river hydro sites in Luzon and Visayas for exploration and development.

According to Energy Undersecretary Jose M. Layug Jr., the government has decided to use the bidding model in granting renewable energy service contracts—as against the “first come, first served” scheme—in a bid to ensure a more level playing field for investors.

“We want more transparency and fairer set of rules. Again, this is not to say that we were not fair in the past. I think the public tender model will be better,” Layug said in a briefing.

Under the existing guidelines, a company interested in acquiring a service contract can submit its application and will be awarded on a first come, first served basis—provided that all requirements have been met. However, the DoE has been receiving a number of complaints about this system, noting that it even actually worked against the government since it might not always be assured of the best work program for a block.

“So now we expect that a bidding model will take out those complaints,” he pointed out.

Layug, however, said that those with pending applications for hydro service contracts would still be served and undergo the normal approval process. There are 149 pending applications for hydro service contracts, which can generate a potential 2,466.15 megawatts. The number of awarded contracts for hydro alone has reached 133, with potential capacity of 1,772.54 MW.

The energy official said the 50 sites to be offered did not include those areas that have been applied for as these potential blocks were those that were under study by the Japan International Cooperation Agency (JICA).

The two-year JICA study showed each area having a potential of 1 or 2 MW.

In a related development, state-run National Power Corp. is also set to start the competitive bidding process for the operations of its small power utilities group (SPUG) in Mindoro and Palawan, where the highest of the consumer-paid subsidies are given, said Napocor president Froilan A. Tampinco.