The Chamber of Commerce of the Philippine Islands

By Myrna M. Velasco – February 18, 2018, 10:00 PM
from Manila Bulletin

The Department of Energy (DOE) is seriously considering a ‘zonal auction’ or “based on location’ bidding of renewable energy (RE) projects that shall be qualified under the Renewable Portfolio Standards (RPS) incentive scheme for the sector.

As noted by Energy Secretary Alfonso G. Cusi, “the economic incentive to RE developers can be provided either through nodal auction or a nodal FIT (feed-in-tariff) system,” primarily for RE technologies that are of variable or intermittent generation like wind and solar.

By this, the energy chief meant that the bidding of RE projects getting into the RPS scheme shall depend on how close these investments will be to the grid or to a power substation.

Cusi made it clear that “the contracting for the RPS to be entered into by the mandated participants will be through competitive selection process (CSP) to ensure that there will be no undue hike in electricity prices that the consumers will ultimately bear.”

He qualified though that auction parameters must significantly consider “zoning aspect” for the plants to optimize their economic benefits to the consuming public.

With proper zoning, he noted that developers would be able to offer more affordable or lower electricity prices also to the consumers.

The energy chief has stipulated this policy direction while keeping in mind the RE sector’s previous pitfalls of developments that had been shackled by constraints of transmission line congestions.

The next phases of installations then, as envisioned by the DOE, shall be largely anchored on areas where transmission networks are ready to wheel or inject new RE capacities to the grid.

Cusi admitted though that the energy department would still need to work harder on educating not just the consumers but also the investors as to their anticipated compliance to the RPS policy.

“The DOE will soon conduct an information campaign to help the concerned sectors gain a deeper understanding of the RPS and assist them in calculating the figures on electricity generation they need to comply with under the RPS,” the energy sectary asserted.

He added that the composite team creation, as prescribed under the policy, will also be a critical element primarily in the intended monitoring of compliance of the mandated distribution utilities as well as on closely watching and eventual review of the policy’s implementation.