The country’s Renewable Energy Market (REM)—a venue for the trading of Renewable Energy Certificates (REC)—was launched Thursday, the Philippine Electricity Market Corp. (PEMC) said.
The launch of the Philippine REM interim commercial operations is a tripartite collaboration with the Department of Energy (DOE) and the United Nations Development Programme (UNDP).
Following the promulgation of the DOE Department Circular No. DC2022-06-0019 entitled “Declaring the Interim Commercial Operations of the Renewable Energy Market” last June 30, the REM interim commercial operations are set to commence on August 26.
“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 J. Pulido III.
Pursuant to Section 8 of the RE Act, PEMC is the entity designated to perform the RE Registrar (RER) functions which shall establish a Renewable Energy Registrar and issue, keep, and verify REC corresponding to energy generated from eligible RE facilities. Such certificates will be used for compliance with the Renewable Portfolio Standards (RPS).
REC is a market-based instrument that represents the property rights and other non-power attributes of renewable electricity generation. PEMC, as the DOE-designated RER, issues one REC for every megawatt hour of actual generation from eligible RE facilities to REM Participants.
During the REM interim commercial operations, participants are expected to actively participate in the activities related to the validation and confirmation of the RECs they receive.
“There is no trading of RECs, and no financial transactions are involved during the interim period, pending the approval of the REC Price Cap,” said PEMC Head of Corporate Planning and Communications Clares Loren Jalocon.
PEMC commenced the REM participant registration in early 2020 and has processed and approved about 96 percent of the applications upon the completion of all the requirements.
“The pandemic notwithstanding, the overwhelming response to the REM has been beyond anything we expected. As of July 2022, with the REM expected participants reaching 281, 98 percent of this have lodged their application with PEMC expressing their interest to participate,” added Jalocon.
Once registered, REM participants are granted access to the Philippine Renewable Energy Market System (PREMS), which performs the major market processes such as registration; REC calculation, issuance, and transfer; and reportorial requirements to the DOE on RPS compliances of the Mandated Participants.
“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,” Pulido said in his opening remarks during the launch.
PEMC is the governing body of the Philippine Wholesale Electricity Spot Market (WESM) for over 10 years.
The WESM is a centralized venue for buyers and sellers to trade electricity as a commodity where its prices are determined based on demand and supply. It was created pursuant to Republic Act 9136, also known as the Electric Power Industry Reform Act of 2001. The WESM began commercial operations in Luzon in June 2006 and in the Visayas in December 2010.
