DOE firms up 2,000MW RE capacity auction


The Department of Energy (DOE) has finally firmed up the initial capacity requirement of 2,000 megawatts for bidding to prepare for the implementation of the Renewable Portfolio Standards (RPS) policy of the RE sector.

Energy Assistant Secretary Redentor E. Delola revealed following the review process the energy department had undertaken to determine the scale of capacity that government will first offer under the Green Energy Auction Program (REAP), or the bidding scheme to be instituted to qualify RE developments for the enforcement of the RPS policy.

Under the RPS, mandated participants – primarily distribution utilities – will need to secure certain percentage of their supply from RE generated capacities, a regulatory scheme aimed at broadening the market of renewables in the country.

The DOE previously indicated that there were plans to increase the capacity-for-auction to more than 2,000 megawatts following adjustments due to lower electricity demand at the height of the COVID pandemic last year.

Nevertheless, Delola qualified that the final decision is to fix the capacity for auction at 2,000 megawatts based on the outcome of the DOE’s final review and from inputs of its consultation with relevant stakeholders.

The bid process for the RE capacity to be offered to investors, Delola said, will be fleshed out upon the effectivity of a Circular issued by the DOE.

On the pricing for the RE auction, he emphasized that consultation has yet to be undertaken by the Energy Regulatory Commission (ERC) – and that process shall be done with all relevant parties.

Dubbed as the ‘green energy auction reserve price’ or GEAR tariff, the final price to be set by the ERC shall serve as the ceiling for the rate of the RE capacity that shall be declared as winning tenders in the auction.

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.”

Source: Manila Bulletin (