DOE: 105 renewable energy projects facing termination

By Lisbet K. Esmael – 02:09 PM October 20, 2024
from inquirer.net

The Department of Energy (DOE) says at least 105 renewable energy projects are at risk of losing their contracts as the government cracks down on “non-serious” developers. INQUIRER FILE PHOTO

MANILA, Philippines — The Department of Energy (DOE) said at least 105 renewable energy projects are at risk of losing their contracts as the government cracks down on “non-serious” developers.

While the Marcos administration has been exerting efforts to attract more green power developments to the market, the sector may be dealing with some hitches as the projects are now “being processed for termination” due to the companies’ failure to meet committed timelines, the agency noted Sunday.

According to the DOE, one of the common reasons for the delays was blamed on their ability to obtain possessory rights or system impact studies, which poses a problem in linking to the country’s grid system.

The DOE has yet to disclose the firms behind these developments when asked, but it said the majority of the contracts were awarded in 2017 and 2019.

The DOE likewise said that of the 105 projects, 88 faced delays in pre-development timeline or were not making any headway. The 88 projects are composed of 53 solar, 17 hydropower, 10 wind, five geothermal, and three biomass developments.

A “clear” termination process is being followed, it further stressed.

For instance, companies holding solar energy service contracts are given two years to complete the pre-development stage: securing permits, conducting surveys, performing feasibility studies, and securing possessory rights. It said that “valid reasons” for the delay, such as force majeure, would only receive an extension.

“The administration of President Ferdinand Marcos Jr. is committed to ensuring the efficient and timely execution of renewable energy projects by regularly assessing the progress of these projects and refining regulatory framework,” Energy Undersecretary Rowena Cristina Guevara said in a statement.

“If any contracts are deemed non-performing, we will open them up to new developers who can effectively bring these projects into fruition. This strategy not only accelerates the development timeline but also strengthens investor confidence in the country’s renewable energy goals,” she added.

Last June, the DOE issued revised omnibus guidelines meant to determine and filter out developers that fall short.

One of the changes is the requirement to obtain a certificate of authority before signing a renewable energy contract, giving companies leeway to obtain necessary permits, surveys, and pre-feasibility activities. The DOE said this would help developers prepare for the implementation and address potential issues.

About 1,435 service contracts with a capacity of over 156,700 megawatts were awarded to clean energy producers as of June 2024, the DOE said.

The government hopes to increase the renewables share in the energy mix to 35 percent by 2030.