October 14, 2024 | 12:00am
MANILA, Philippines — The Energy Regulatory Commission (ERC) should finalize the pricing mechanisms for the third round of the green energy auction (GEA) program so it can move forward this year, a lawmaker said.
“That is one of the priorities I think we need to do, because in everything, the goal is to make the shift to renewables, and this is directly related to that,” Sen. Pia Cayetano said at a recent budget hearing.
For GEA-3, the Department of Energy (DOE) is expected to offer impounding hydro, pumped-storage hydro, run-of-river hydro and geothermal contracts with a combined capacity of 4,399 megawatts (MW).
However, for the bidding round to proceed this year, the ERC must first determine the GEA reserve prices, or the maximum price offers that are used as the ceiling price in the auction.
“I hope we can get that done. I understand there are things that have to be done on the side of ERC as well,” said Cayetano, who chairs the Senate committee on energy.
She pointed out that many investors are awaiting the launch of the third auction round.
The DOE, meanwhile, has assured lawmakers that GEA-3 will be completed before the end of the year, highlighting its coordination with the energy regulator.
“One of the items required there would be the approved pricing methodologies with ERC. We’re coordinating that,” Energy Secretary Raphael Lotilla said.
In the past two years, the DOE has conducted two GEA rounds, attracting total renewable energy (RE) commitments of 5,306 MW for delivery from 2024 to 2026.
But the energy department only secured 3,580.76 MW of committed capacities for GEA-2, or around 30 percent of the total 11,600 MW available.
This left more than 8,000 MW of unsubscribed capacity.
Among the reasons for low investor turnout cited by the DOE were supply limitations, low incentives, delays in the conduct of grid impact studies and the cost of financial guarantees.
Earlier, RE developers called for an improvement in future GEA rounds to allow more energy players to participate actively and see the pricing signals as correct.
The GEA program is designed to trigger the expansion of the country’s RE capacity to support the government’s target of increasing the share of renewables in the energy mix to 35 percent by 2030 and 50 percent by 2040.
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