Half of the total 42 contracts the government awarded to Leandro Leviste-led Solar Philippines to put up solar plants may get canceled due to the company’s failure to comply with timelines, an energy official said.
Energy Undersecretary Rowena Cristina Guevara disclosed this at a budget hearing on Wednesday.
“Twenty-one of the contracts are already being processed for termination because they are not able to deliver the scheduled targets of the work program,” Guevara said. These deals were voluntarily committed or acquired through government auctions.
Her statement came after Senate President Pro Tempore Jinggoy Estrada questioned the company’s seemingly sluggish progress after bagging the contracts.
According to Estrada, Solar Philippines, which was created in 2013, and its affiliates committed about 10,000 megawatts (MW), however, only 174.41 MW or 2 percent have been launched so far.
The senator pointed out that some developers only needed two to three years to complete their solar projects, while Solar Philippines has “taken more than three years to even take its projects to development phase and much longer for actual construction.”
“Why do you keep on awarding contracts to them? The remaining 10,000 MW depend on Solar Philippines, which could significantly compromise the DOE’s (Department of Energy) ability to meet its commitment to transitioning to renewable energy. I hope you seriously consider this matter,” Estrada said.
Solar Philippines has yet to reply when asked for comments.
Guevara also noted developers have faced challenges in pursuing renewable energy developments, with purchasing land as the topmost issue.
“Previously, possessory rights were not required when we issued service contracts. However, under the new guidelines, developers must have possessory rights before service contracts are granted,” Guevara said. Possessory right is the legal right to use or occupy a land.
The DOE official said the agency would issue new terms of reference for subsequent green energy auctions to address land rights.
The Green Energy Auction Program seeks to speed up the growth of renewable energy capacity in the Philippines, with the government targeting to increase its share in the power mix to 50 percent by 2040 from 22 percent at present.