DOE monitoring project compliance under GEAP

BY MYRNA M. VELASCO – March 13, 2023 2:35 PM  
from Manila Bulletin

The Department of Energy (DOE) is monitoring progress on the implementation of renewable energy (RE) projects that had been awarded with long-term power supply agreements (PSAs) under the Green Energy Auction Program (GEAP) of the government.

According to Energy Assistant Secretary Mylene C. Capongcol, there is a system of monitoring that the department has been enforcing when it comes to the RE capacities that shall be delivered starting this year within GEAP’s precept.

The GEAP is a policy mechanism that provides alternative market to RE projects – that way, capital influx can be stimulated for green energy ventures.

She emphasized that the initial capacity for commercial operation this year will be coming from a biomass plant – and that will be at a relatively marginal capacity of less than 5.0 megawatts.

“So far, for the committed capacity this year, that’s already okay. The rest (of the GEAP-awarded capacities) will be due 2024 and 2025,” the energy official stated.

As could be gleaned from DOE documents, the winning bidder in the 2022 RE capacity auction that will be utilizing biomass technology is the 10MW cogeneration plant developed by Cotabato Sugar Central Company Inc. in the Mindanao grid.

In that project, out of its installed capacity of 10MW, it was noted that the GEAP-covered fraction of the facility’s generation will be 3.4MW.

The DOE-awarded 2,000MW RE capacities that were underpinned by 20-year PSAs account for the first green capacity bidding carried out June last year. Bulk of the awarded contracts had been for solar; while the rest were spread on to wind, hydro and biomass technologies.

For the Luzon grid, solar capacity auctioned had been at 900MW, but awarded contracts covered aggregate capacity of 1,070.38MW; and it goes the same way for Visayas grid – of which the solar capacity originally slated for auction was at 260MW, but awarded capacity reached 300MW; while for Mindanao grid, the bidded capacity stood at 100MW but the awarded capacity hovered at 120MW.

Under the auction terms, it was specified that sanctions will be enforced against the project sponsor-firms that would not be able to deliver on their committed capacities within the commercial operations date (COD) specified in the contracts.

The energy department conveyed that if the winning bidders would fail to bring committed capacities to commercial operations within the warranted delivery timeframe, their respective bid bonds will be confiscated.

The bid bond, which accounts for 20-percent of the RE project cost, is one of the major requirements that shall be submitted by a qualified bidder, as stipulated under the terms of reference (TOR) of the RE auction.

It was further prescribed that the awarded PSAs to the RE developers had been anchored on “pay as you deliver basis,” – meaning, payment for capacity shall be based on generated capacity to be delivered and the payment price shall be reckoned on the winning price offer of a specified developer.