DOE delays 2,000MW RE capacity auction to October
By Myrna M. Velasco – June 28, 2021, 6:00 AM
from Manila Bulletin
The Department of Energy (DOE has deferred until October this year the targeted auction of 2,000 megawatts of renewable energy (RE) capacity to be covered by the Renewable Portfolio Standards (RPS), a mechanism that provides an alternative market to RE investments.
“We will have delays, we have to move the auction to a later date. We are working on hopefully completing the entire auction by October this year,” Energy Assistant Secretary Redentor E. Delola said.
Essentially, that will be a delay of four months from the initial target of RE capacity bidding for the RPS, which was initially targeted for June this year.
Delola explained the energy department is still “finalizing the simulations considering the impact of COVID-19 and the alignment to the CES (clean energy scenario,” as integrated in the updated Philippine Energy Plan.
The energy official added “we are still evaluating the needed adjustments to the annual increment on the RPS requirements,” as he also qualified that the penciled in number of 2,000MW remains to be a moving target.
It was gathered from industry sources that because of the very low power demand during the Covid-19 pandemic, the initial number showing up for the RE auction is way below 2,000MW. Hence, it is being weighed by the DOE if this has to be re-calibrated based on demand prevailing during normal conditions.
Another to-do list for the government would be the “green energy tariff” for the capacity to be tendered under the Green Energy Auction Program (GEAP) – the final numbers of which have yet to be rendered by the Energy Regulatory Commission.
The planned capacity auction is depended upon by RE investors, so they can ramp up developments on their targeted installations – because the result of the bidding shall serve as a guarantee that their generated electricity can be covered by RPS-underpinned power supply agreements (PSAs).
Under the RPS policy, off-takers or capacity-buyers like distribution utilities are mandated to source percentage of their supply portfolio from RE facilities; and the growth of that RE-based supply procurement shall be at 1.0-percent increment annually.
At the DOE, a designated “Green Energy Matching Committee” (GEMC) will be spearheading the auction of the capacity that shall form part of the power distribution utilities’ compliance to the RPS framework.
As prescribed under the rules, “qualified RE projects can voluntarily participate by offering all or a portion of the electricity generated by their RE facilities as peak/off-peak baseload supply with corresponding price offers set on a quarterly basis.”
The “green energy tariff”, according to the DOE, shall “set the price signals on the commercial value of electricity generated from RE facilities.”
The energy department further noted that the RE pricing shall be established on a peso-per-megawatt hour (PhP/MWh) basis “to reflect the actual value of energy generated by the qualified RE project and to be consistent with the compliance requirements of the RPS on-grid rules.”
