DOE still keen on conducting 3rd round of clean energy auction
By Lenie Lectura – September 30, 2024
from Business Mirror
The Department of Energy (DOE) remains hopeful that the third round of green energy auction would still happen this year after Malacañang appointed an officer-in-charge for the Energy Regulatory Commission (ERC), which determines the ceiling price for the auction.
“Hopefully within the year we will be able to conduct the GEAP (green energy auction program) for geothermal and pump storage hydro,” said DOE Assistant Secretary Myleen Capongcol.
GEAP promotes transparent and competitive pricing for RE and enhances project bankability through a 20-year offtake guarantee. The DOE sets the policy while the ERC decides the Green Energy Auction Reserve (GEAR) prices.
Alternergy Holdings Corp. is anticipating the resumption of the green auctions as it expressed interest to participate in GEA3 and possibly GEA4.
“We are very excited about the prospect of participating in GEA 3 and 4. We are working with industry players, with our colleagues in the industry, together with the DOE, to make sure that all the policies are in place, the mechanics are very clear. We’re really working hand-in-hand with government to make sure that GEA 3, GEA 4, and future GEAs will take place,” said Alternergy president Gerry Magbanua.
For GEA3, Magbanua said the company can participate by offering the output of its 17.4-megawatt (MW) Kiangan run-of-river hydro project.
“Actually, (there are) possibly three paths. One is the feed-in tarif. As you know feed-in tariff is not yet fully subscribed so there’s still about 168MW available and we look we look into that.
Second is GEA3. We will see if GEA 3 would be more attractive to us depending on what prices will be made available. And, of course, there’s always the possibility of entering into a bilateral agreement with a potential off-taker,” Magbanua said.
Last year, GEA2 only secured a total committed capacity of 3,580.76MW out of the 11,600MW available, leaving more than 8,000 MW of unsubscribed capacity.
Back then, the ERC has set the GEAR prices for GEA-2 at P4.4043 per kilowatt hour for ground-mounted solar, P4.8738 per kWh for rooftop solar, P5.3948 per kWh for floating solar, P5.8481 per kWh for onshore wind, P5.4024 per kWh for biomass and P6.2683 per kWh for biomass waste-to-energy.
Sun Asia Energy CEO Tetchi Cruz-Capellan urged the ERC to review the tariff rates because these “do not reflect the realities” of the current demand and supply of electricity in the country.
Capellan, who is also the founder of the Philippine Solar and Storage Energy Alliance (PSSEA), said the group has tapped a third-party consultant to come up with a more optimal price level and present the results to the DOE and ERC.
“What we have done now, we commissioned the Mott MacDonald Study. The PSSEA has commissioned a third-party international consulting firm. They are studying all floating solar. They will show the costs. (Mott MacDonald) will make a presentation on October 18 to the DOE and ERC about their findings,” said Capellan.
Also, Capongcol said the DOE is in talks with the Land Bank of the Philippines, Development Bank of the Philippines, Philippine Guarantee Corp. and the Department of Finance (DOF) to assist geothermal energy developers in minimizing their financial risk exposure.
“The de-risking facility is about $250 million,” Capongcol said. “Whoever is eligible, they are entitled up to 50 percent of the drilling and exploration costs which are the most expensive and riskiest part of geothermal development.”
The Asian Development Bank and the DOF are helping the DOE craft the mechanics and review the applications of interested geothermal firms.
