DOE lists 2,619MW eligible RE capacity

Published January 16, 2022, 12:45 PM

by Myrna M. Velasco

The Department of Energy (DOE) has listed 2,619 megawatts of eligible renewable energy (RE) capacity that can be granted incentives under the Renewable Portfolio Standards (RPS) in the energy sector.

RPS is an incentive mechanism for RE investments in the country because it provides market for RE generated capacities by requiring distribution utilities (DUs) to procure prescribed percentage of their supply portfolio from RE sources.

solar farm photo

In data released by the energy department, it was emphasized that the bulk of the capacity to be included in the RPS will be from solar plants at 1,312.96MW comprising of both completed and under-construction projects.

For hydro plants, RPS capacity inclusion had been placed at 412.80MW while for wind farm developments, it was pegged at 409.9 megawatts. Geothermal installations are at 218.5MW capacity while biomass facilities have 264.85MW capacity.

The DOE previously indicated that it has been preparing for capacity auction of 2,000MW for qualified RE projects to be awarded with power supply agreements (PSAs) under the RPS policy but the actual bidding date has yet to be carried out.

The “green energy pricing” for the RPS-underpinned capacity is still under deliberations also at the Energy Regulatory Commission (ERC). It is one regulatory hurdle yet to be addressed before the RE auction could be administered.

The DOE noted that the RPS-eligible plants are still at their various stages of implementation within on-grid and off-grid domains while some plants are already in operation and the rest are completed projects but not yet operating.

With RPS, investors in the RE sector are eyeing that they can corner a pie of the market through mandated off-take capacity purchase of the distribution utilities, that in turn could assure them of revenue stream for specified number of years as stipulated in the supply contracts.

The yearly increment in RPS capacity was originally targeted at one percent, but there are proposals to raise it at the scale of two to 2.52-percent annually, although that is still being reviewed by the energy department.

With the anticipated policy enforcement, the DOE is eyeing that RE capacity in the country’s energy mix will increase to more than 44,000MW by 2030 and will be ramped up further to 71,000MW by year 2040.

The agency explained that the country’s ambitious target for greenfield RE installations would be aligned with the “energy transition paradigm” as cast in the updated Philippine Energy Plan.