DOE targeting to hit RE goal in power mix via green energy auction scheme

BY LENIE LECTURA – AUGUST 4, 2021
from Business Mirror

File photo shows one of EDC’s 12 integrated geothermal power stations.

The Department of Energy (DOE) is soliciting comments from industry stakeholders on a draft circular that seeks to achieve a 35-percent renewable energy (RE) share in the power generation mix by implementing the Green Energy Auction Program (GEAP).

Under the GEAP, those consuming at least 100 kilowatts of power may source their supply from qualified retail energy suppliers (RES) that generate electricity from renewables. The RE supply will be facilitated by qualified RE suppliers via a Competitive Selection Process (CSP).

“The Green Energy Auction is hereby established as a mechanism to facilitate the selection of eligible RE pants through a CSP or auction,” the revised draft circular on the guidelines for GEAP stated.

The DOE is requesting all interested parties to submit comments and recommendations until August 6.

The agency has yet to set a date for the competitive auction and the volume of capacity to be offered.

“For the volume, we will release it together with the notice of auction after we finalize the revised guidelines. October is still the target auction date. We just need to revise the GEAP design to take into consideration the substantial developments in the RE industry. The major change here is the design of the auction,” said DOE Assistant Secretary Redentor Delola in a text message when sought for comment.

He added that GEAP would be similar to the FIT (feed-in-tariff) program, albeit the tariffs will be determined through competitive auction.

The DOE was earlier looking at 2,000 megawatts (MW) of RE capacity for auction. Delola said the capacity to be decided later on will depend on the supply requirements of power utilities as well as the need to meet the country’s goal of hitting the RE generation target.

“The old design was merely reliant on the RPS (Renewable Portfolio Standards) requirements of the DUs [distribution utilities]. The new design takes into consideration the projected requirement capacity additions needed to achieve the RE generation target of 35 percent by 2030,” said the DOE official.

RPS requires power DUs, electric cooperatives, and retail electricity supplies (RES) to source an agreed portion of their energy supply from eligible renewable energy RE facilities.

Under the revised GEAP guidelines, an RE developer shall be deemed qualified if the RE facility being offered has no existing power purchase agreement with any distribution utility or end-user.

For now, the DOE has registered 10 entities qualified under the GEAP. These are Aboitiz Energy Solutions, Inc.; Prism Energy, Inc.; Adventenergy, Inc., Bacman Geothermal, Inc.; First Gen Energy Solutions, Inc.; SN Aboitiz Power-Magat, Inc.; SN Aboitiz Power-Res, Inc.; AC Energy Philippines, Inc.; Sparc-Solar Powered Agri-Rural Communities Corp.; and Citicore Energy Solutions Inc.

Moreover, the auction capacity requirement shall be determined based on the capacity needed by the grid for sufficient supply, levels of RE to maintain the RE generation mix target set by the DOE; and volume of RE contracts in the market.

Delola is confident that the country’s RE goal would be met, alongside with the following objectives:

• Provide immediate and timely investments in new or additional RE capacities to ensure provision of adequate supply and competitive rates of electricity in the country.

• Support the development of, and increase access to financing for, new RE projects under a competitive process, together with long-term contracts.

• Implement the mandate of giving preference to RE sources of energy for a cleaner and sustainable environment.

Under the DOE’s Philippine Energy Plan, the RE share in the power mix should hit 35 percent until year 2030. This entails additional installations of up to 34,000MW.