Government sets auction for power capacity from renewables

The third round of the Green Energy Auction (GEA) is scheduled in November this year while the unsubscribed capacities from the second round of GEA will be auctioned off next year, an official of the Department of Energy (DOE) said Monday.

“Next year is the auction for the unsubscribed 8,000 megawatts (MW) from GEA-2 while GEA-3 in November is for geothermal, hydro run-of-river, and pump-storage hydro,” said DOE Undersecretary Rowena Guevarra, adding that the capacities for GEA3 will be announced upon the release of the Notice of Auction.

Under the GEA-2, a total capacity of 11,600 MW installation target was auctioned off. The DOE received bid offers totaling 3,580.76 MW but the capacity was later trimmed to 3,440.756MW after the bid bonds of three potential winning bidders were not accepted for failure to comply with the terms of reference. Hence, 8,159.24MW of capacity were unsubscribed.

The Energy Regulatory Commission (ERC) earlier said there will be another Green Energy Auction Reserve (GEAR) price for the 8,159 megawatts (MW) of unsubscribed renewable energy (RE) capacity.

“If the unsubscribed would be auctioned off again then the rates for that would be different,” ERC Chairperson Monalisa Dimalanta said.

A total of 105 winning bids have been issued notices of awards by the DOE for the GEA-2 last July 3. The 3,440.756 MW of renewable energy (RE) capacities have been committed for development and installation from 2024 to 2026.

The GEA program was designed to continuously trigger the increase of RE capacity in the country, which will help realize the government’s target of 35 percent RE in the energy mix by 2030 and 50 percent by 2040.

The first round of GEA was conducted in June last year. It generated almost 2,000MW of capacities that were committed to deliver energy from 2023 to 2025. During the GEA-1, the DOE issued 18 certificates of award of RE capacity, which are committed to go onstream beginning this year.

The DOE will develop a specific auction policy and guidelines for GEA-4.

Last July, lawyer Jose M. Layug Jr., co-chairman of the European Chamber of Commerce’s Renewable Energy and Efficiency Committee, said regulators must come up with “the most optimal rates” to attract more bidders to the government’s green energy auction.

“Ultimately, price is the most significant factor in endeavors like this (GEA), so it should be set at a level that is most optimal to all stakeholders,” he said.

“We laud the efforts of the DOE and ERC [Energy Regulatory Commission] in the aggressive transition to renewables with the ambitious RE installation targets. While the DOE did not meet its aspiration in this round, it would be good to review and assess several factors that yielded such results.”