Renewable Energy Market begins full commercial operations
- January 31, 2025
The Philippines officially began trading Renewable Energy Certificates (RECs) last December 2024, according to a press release from the Department of Energy (DOE). This marks the full commercial operation of the Renewable Energy Market (REM).
What is a renewable energy certificate (REC)?
A REC (pronounced: rěk, like wreck) is a market-based instrument issued when one megawatt-hour (MWh) of electricity is generated and delivered to the power grid from a renewable energy (RE) source such as solar, wind, hydro, geothermal, and biomass.
As the currency of the renewable energy market, RECs enable buyers to choose clean energy and reduce their carbon footprint. They also support the development of new RE projects, adding more sustainable power to the grid.
According to the Asian Development Bank (ADB), RECs can “help accelerate a country’s transition to clean energy and its progress toward decarbonization targets by helping make renewable energy generation economically viable.”
RECs are currently capped at P241.56/MWh, a price determined by the Energy Regulatory Commission (ERC).
(Also read: Renewables make up lion’s share of new energy projects in 2025)
What is the Renewable Energy Market (REM)?
The REM provides a trading venue for RECs. Designed to accelerate the development of RE projects and bolster the country’s transition to clean energy, the REM is a “cornerstone mechanism” under the Renewable Energy Act of 2008.
The REM helps mandated participants such as distribution utilities, electric cooperatives, and retail electricity suppliers comply with the Renewable Portfolio Standard (RPS). The RPS is a market-based policy that mandates electricity suppliers to obtain an agreed portion of their energy supply from eligible renewable energy sources.
In 2023, the annual RPS requirement for grid-connected areas rose from 1% to 2.5%. Renewable energy is projected to supply 11.4% of the total power demand in 2024, underscoring the vital role of the REM in achieving compliance targets.
(Also read: AboitizPower Champions a Multifaceted Approach to RE Growth)
Driving a clean energy transition
Almost 300 participants are expected to register with the REM. As demand for renewable energy grows, Energy Secretary Raphael P.M. Lotilla anticipates that the trading and usage of RECs will become more frequent.
“The full commercial operation of the REM is pivotal in advancing the country’s clean energy transition,” said Secretary Lotilla. “It supports compliance with the RPS, fosters investment in renewable energy, and ensures a robust framework for sustainable energy trading.”
Sources:
https://doe.gov.ph/press-releases/rec-trading-starts-26-december-2024-full-operationalization-rem
https://www.epa.gov/green-power-markets/renewable-energy-certificates-recs
https://www.philstar.com/business/2024/12/25/2409625/re-market-all-set-full-operation
https://www.wesm.ph/market-development/re-market/frequently-asked-questions
