Third green energy auction moved to 2025

By Sheldeen Joy Talavera, Reporter

THE THIRD ROUND of the green energy auction (GEA-3) will be moved to 2025, pending issuance of the pricing mechanism that will set parameters for each technology offered, a Department of Energy (DoE) official said.

“So, the Green Energy Auction Program, we have GEA-3… It’s January of next year,” Energy Undersecretary Felix William B. Fuentebella said during the Energy Investment Forum 2024 on Thursday.

The DoE previously said that it is targeting to conduct GEA-3 within the year.

The GEA program aims to promote renewable energy as one of the country’s primary sources of energy through competitive selection. Renewable energy developers compete for incentivized fixed power rates by offering their lowest price for a certain capacity.

In November, the DoE issued the notice of auction and the terms of reference, inviting qualified energy developers to participate in the bidding.

For GEA-3, the government targets to auction off renewable energy capacity worth 4,475 megawatts (MW), covering both technologies that are eligible and non-eligible to feed-in-tariff (FIT) program.

The DoE will offer 4,000 MW of pumped storage hydropower capacity, with target delivery between 2028 and 2032.

It will also offer 300 MW of impounding hydropower capacity for 2028-2030 delivery, and 100 MW of geothermal capacity scheduled for 2025 to 2027.

The DoE will also auction off around 75 MW capacity of run-of-river hydro, a FIT-eligible renewable energy technology, which will be due for delivery between 2027 and 2029. 

“These projects will play a crucial role in meeting the country’s growing electricity demand while ensuring that future power generation is increasingly sustainable,” the DoE said in a statement in November.

On the sidelines of the forum, Energy Assistant Secretary Mylene C. Capongcol said that the Energy Regulatory Commision’s (ERC) issuance of the pricing determination methodology (PDM) for the auction would coincide with the holiday season.

Asked to comment, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that the commission is about to discuss comments on the PDM submitted by stakeholders. She said they are still aiming to issue the PDM within the month.

“Most comments are about details of the methodology and the pricing formula. There are also comments on the fact that for pumped storage hydro the asset will most likely provide ancillary services instead of supply or energy,” Ms. Dimalanta said in a Viber message.

The ERC is responsible for establishing the PDM that the bidders will adopt under the GEA program. The PDM is used to evaluate the price offered by bidders.

In October, the ERC released its draft pricing rules which would involve two sets of evaluation to assess the “reasonableness and prudency” of each price offer.

“The PDM is for GEA-3, which has a different price mechanism compared to GEA-1, GEA-2 and GEA-4. We fully understand the need for the issuance of PDM to allow GEA-3 bidders to review and study the feasibility of bids they will submit,” said Jose M. Layug, Jr., president of the Developers of Renewable Energy for Advancement, Inc., when sought for comment.

The DoE staged GEA-1 in 2022 and attracted 1,966.93 MW worth of bids for renewables, while GEA-2 was held last year, where 3,440.76 MW worth of service contracts were awarded.

The GEA program is designed to help the Philippines achieve its renewable energy goal which is increasing its share in the power generation mix to 35% by 2030 and 50% by 2040.

The DoE is also planning to hold two more rounds — GEA-4 will cater to integrated renewable energy and energy storage systems while GEA-5 will cover offshore wind technologies.

Ms. Capongcol said that the agency is hoping to release the notice of auction and terms of reference for GEA-4 within the month.