ERC studies removing price ceiling in RE auction

By Alena Mae S. Flores – October 4, 2023, 8:30 pm
from manilastandard.net

The Energy Regulatory Commission (ERC) plans to remove the price ceiling for the upcoming auction of geothermal, run-of-river hydro and pumped storage hydro projects this year.

The ERC is preparing the reserve price for the Department of Energy (DOE)’s Green Energy Auction Program (GEAP) 3 in November.  GEA reserve prices serve as the price offer ceiling.

“We’re still discussing with DOE because it’s a different technology. The cost are front-ended. We’re studying if it’s possible not to put a reserve price, a GEAR, and we’ll just evaluate after the bids are submitted,” ERC chairperson Monalisa Dimalanta said.

Dimalanta said ERC should make a decision within the month because the DOE wanted to start the auction process by November.

“If we do not set the reserve price… we’ll have to evaluate on a per offer basis. We’re still weighing it out and we’ve been conducting FGDs [focus group discussions] with investors also,” Dimalanta said.

She said the ERC would also discuss with financing institutions such as banks “what would be more palatable to the banking industry because they’ll be the ones to finance all these projects.”

She said investors might want a reserve price to avoid regulatory risk, but if the reserve price is too low, some investors might consider taking the risk.