The Green Energy Auction Committee (GEAC) of the Department of Energy (DOE) has officially kicked off the tendering process for 2,000 megawatts of renewable energy (RE) capacity that shall be accredited in the government's Renewable Portfolio Standards (RPS), a market mechanism that will guarantee revenue stream for project developers via power supply agreements (PSAs) with distribution utilities.
In a “notice to auction” officially issued by Energy Secretary Alfonso G. Cusi and circulated by the DOE on Friday, Jan. 28, the GEAC stipulated that it is inviting “all qualified suppliers to participate in the first round of the ‘green energy auction’ for RE.”
Based on the tender notice, the project developments will have to be spread across grids in Luzon, Visayas and Mindanao and shall also cover various RE technologies -- including hydro, biomass, solar and wind projects.
In the array of RE technologies, solar will have the lion’s share while wind farm installations come in second, followed by biomass and then hydro ventures.
For hydropower, the RE capacities that the project sponsor-firms can bid for will be 80 megawatts in Luzon and 50MW in Mindanao. Bidders can also vie for 60 MW biomass required capacity in Luzon 120 MW in the Visayas and 50 MW in Mindanao.
Solar developers, on the other hand, are in for a larger share as the targeted offers from this technology would be 900 MW in Luzon; 260 MW in the Visayas; and 100 MW in Mindanao. Altogether, that will run up to 1,260 MW just for that project development sphere.
For wind farm installations, the energy department is equally bullish, as it is soliciting capacity tenders of 360 MW for Luzon; and 20 MW for Visayas. There is no allotment for now in the Mindanao grid.
As the DOE already opened the auction process, it also apprised prospective investors of the deliverables tied to the conduct of the RE capacity bidding – including the issuance of the "green energy auction reserve" or GEAR price by the Energy Regulatory Commission (ERC), release of the terms of reference (TOR) and auction round procurement, as well as the registration of qualified suppliers.
The energy department similarly laid down the timelines as to the last day of registration of the qualified suppliers; evaluation process on the qualified suppliers; posting of qualified bidders; pre-bid conference; the actual conduct of the RE capacity auction; and the posting of the notice of award.
As prescribed, the RPS policy will require mandated participants – primarily the distribution utilities –to secure certain percentage of their supply from RE generated capacities to broaden the share of RE in the country’s energy mix.
The energy department noted that the qualified RE project-firms “can voluntarily participate by offering all or a portion of the electricity generated by their RE facilities as peak/off-peak baseload supply with corresponding price offers set on a quarterly basis.”
The “green energy tariff”, according to the department, will “set the price signals on the commercial value of electricity generated from RE facilities.”
The energy department expounded that the RE pricing shall be established on a peso-per-megawatt hour (PhP/MWh) basis “to reflect the actual value of energy generated by the qualified RE project and to be consistent with the compliance requirements of the RPS on-grid rules.”