DOE to exempt waste-to-energy projects from CSP policy

The Department of Energy (DOE) is instituting a policy that will exempt waste-to-energy (WTE) biomass power projects from the competitive selection process (CSP) requirement in their power supply agreements (PSAs).

CSP is an auction scheme mandated upon off-taker distribution utilities, like that of the Manila Electric Company (Meralco), if they will have to procure generated capacity from power plants to become part of their supply portfolio.

In a draft Circular issued to relevant stakeholders, the DOE said "eligible biomass WTE facilities shall be exempted from the conduct of CSP in entering a PSA with a distribution utility.”

That exemption can be secured, the energy department emphasized, “if the biomass WTE developers can secure a favorable endorsement from the host local government unit;” and upon compliance to all the requirements prescribed by the DOE.

The agency further noted that the duration of the PSAs being pushed for WTE facilities will be for a period of 20 years – a contract length considered to be a ‘gold standard’ in the deregulated state of the Philippine power industry.

Beyond CSP exemption, WTE biomass installations can also be lined up in the trading of renewable energy certificates (RECs) which the mandated participants – primarily the DUs – can tap into for their compliance to the Renewable Portfolio Standards (RPS) edict of the RE sector.

As stipulated by the DOE, “every one-megawatt hour sourced from duly registered eligible biomass WTE facility shall be granted one RE certificate under the RE market,” and it is required that these shall be properly metered so these could serve as basis for the issuance of RECs.

The WTE biomass power projects shall likewise be accorded ‘priority dispatch’ in the merit order, hence, their generated capacities will be assured of utilization once declared for availability in the power system.

“To promote investments in WTE development, eligible biomass WTE facility shall enjoy the benefit of priority dispatch,” the energy department stressed.

The DOE said it is aggressively enticing investments for WTE facilities as baseload RE generation because these can “contribute to solid waste management, benefit to the local economy and create green jobs.”

The energy department added that WTE ventures are “recognized as relevant intervention in reducing methane emission by conversion of wastes into usable heat, electricity or fuel.” ###