DOE plans to bid out 2,000MW RE capacities on June 17

Published May 12, 2022, 4:04 PM

by Myrna M. Velasco

Roughly two weeks before the exit of the Duterte administration, the Department of Energy (DOE) is scheduling on June 17 the first round of bidding of 2,000 renewable energy capacities under the Green Energy Auction Program (GEAP).

An advisory issued by Energy Secretary Alfonso G. Cusi on Wednesday, May 11, stipulated that the registration of qualified RE suppliers shall be carried out on May 21-24 this year while the posting of qualified bidders will be on or before May 31.

The pre-bid conference is slated on June 1, a process will give prospective bidders the chance to raise questions relating to the GEAP’s terms of reference (TOR) as well as the propounded green energy auction reserve (GEAR) pricing for solar, wind, hydro and biomass technologies.

The DOE qualified though that “the pre-bid conference and all subsequent activities shall only be conducted upon the release of the GEAR prices by the Energy Regulatory Commission (ERC) on or before May 30, 2022.”

Energy Assistant Secretary Redentor E. Delola reiterated that next month’s RE capacity auction is slated as “we are hoping that the ERC already released the GEAR prices by May 30, for us to move to the bidding by June 17.”

Should the scheduled competitive bidding be concretized on the target date, the energy department stated that it will be posting the notice of award on June 24, 2022 – or just six days before the end of tenure of the current government leadership.

As fleshed out by the DOE, the scale of solar capacities to be auctioned shall hover at 1,260 megawatts – with the bulk in Luzon at 900MW; then 260MW in the Visayas; and 100MW in Mindanao.

For hydropower, the RE capacities that the project sponsor-firms can bid for will be: 80 megawatts in Luzon and 50MW in Mindanao; while for biomass, required capacity installations would be 60MW in Luzon; 120MW in the Visayas and 50MW in Mindanao.

Investors eyeing wind farm installations shall be allocated 380MW in the RE tendering process – and the breakdown had been set at 360MW for Luzon; and 20MW for Visayas grid.

For geothermal, which is a conventional RE technology, the plan of the DOE is to come up with separate terms of reference for capacity auction in that sub-segment of the industry.

In the preliminary order issued by the ERC on GEAR pricing, the proposed tariff for solar technology had been pegged at P3.6248 per kilowatt hour (kWh); wind at P5.2887 per kWh; biomass at P5.5480 per kWh; and run-of-river hydro at P5.8705 per kWh.

The GEAR price will serve as the cost ceiling for financial offers that RE developers will be submitting per technology – and the likely winners are those with lower price tenders vis-à-vis the reserve price; and they must also possess the warranted technical and legal qualifications set forth in the TOR.

The RE auction shall satisfy the compliance of industry participants to the Renewable Portfolio Standards (RPS) policy designed by the government – and such shall primarily cover the distribution utilities (DUs) which are mandated to source prescribed percentage of their supply from RE generating facilities.