DOE to allow 50% RE replacement power for GEOP within 3-year transition period

The procurement of replacement power under the Green Energy Option Program (GEOP) will be allowed at 50 percent renewable energy (RE) capacity during the three-year transition period that shall be enforced in the amended policy for this segment of the power industry.

In a draft Circular furnished to the relevant industry stakeholders, the Department of Energy (DOE) specified that within the propounded transition phase, “the total energy supplied (in kilowatt-hours) to an end-user shall be at least 50 percent coming from RE sources.”

The replacement power, it was noted, can be contracted by the GEOP electricity supplier (GES) either with a distribution utility, via the Wholesale Electricity Spot Market (WESM) or from the generation companies.

At the lapse of the transition period, the DOE expounded that “in support of the greater development and utilization of RE resources, any replacement power shall exclusively be sourced from RE resources.”

Apart from that modification in the GEOP guidelines, the DOE will also be relaxing the capacity threshold to a level below 100 kilowatts (kW) – primarily for end-users that are within contiguous domains, provided that they shall be aggregating their demand in their procurement of green energy capacities.

The energy department specified that these customers may “opt to aggregate”, especially if they are classified as ‘contiguous areas’ — such as those of condominium buildings, commercial establishments, mixed-use development complexes or similarly situated businesses.

Under the existing rules, the end-users eligible to participate in the GEOP would be those that have average monthly peak demand from 100kW to below 300kW for the next 12 months and had registered historical monthly peak demand of at least 100kW for three consecutive months.

Anchored on a target to offer more RE capacities to consumers via GEOP, the draft DOE Circular proffered that “any electricity end-users with an average peak demand below 100 kW can already participate in the program.”

The proposed amendments in the GEOP rules had already been circulated to relevant industry stakeholders for their respective comments and inputs – and some of these would be ultimately integrated in the final policy framework to be issued by the DOE.

Additionally, the department stated that “all electricity end-users located in economic zones, may opt to participate in the GEOP through direct contracting with a GES or through a tripartite agreement with its economic zone utility and a GES.”

In the targeted energy transition pathway of the Philippines, GEOP is also dangled as alternative market incentive to investors in the RE sector because that will broaden the base of end-users that will be patronizing RE – and this is a strategic business play for companies that have been advancing their sustainability goals as well as net zero ambitions.

On the customer switching sphere, it was emphasized that the end-user can revert to the services of a franchised distribution utility as long as it had already fulfilled all of its contractual obligations with the GES during its participation in the GEOP.

Conversely, customers can still return as GEOP participant if they would eventually want to get out again from the service domain of a DU or electric cooperative – but with condition that they do not have outstanding contractual obligations anymore with their servicing power utility.