The Department of Energy (DOE) is requiring "indivisibility" or "no competing supply contract" for the capacity generation that qualified bidders will be offering in the government's Green Energy Auction Program (GEAP) slated this June 17.
According to Energy Assistant Secretary Redentor Delola, the whole capacity of the plant shall be offered in the tender to be submitted by a qualified bidder will come with definitive declaration that there are no other off-takers (capacity buyers) of the facility’s electricity generation.
“They have to submit an undertaking that they do not have any other legal impediments. It shall be full capacity of the plant, there’s indivisibility rule,” the energy official explained.
At least 73 projects had been in the roll of the energy department as ‘qualified bidders’ for the initial round of RE auction which will cover 2,000 megawatts of capacity – and that shall be generated across technologies – primarily from solar, wind, biomass and hydro resources.
Geothermal has not been included in this batch of RE capacity auction as the DOE deems that there should be separate terms of reference (TOR) for the bidding notice that shall be issued for that technology.
In determining the winning bidders in the RE auction, Delola noted that “the bids will be ranked from the lowest, provided they are lower than the GEAR (green energy auction reserve) price, until the target capacity is filled.”
The GEAR tariff as prescribed by the Energy Regulatory Commission (ERC), shall serve as the ‘price ceiling’ in the financial offers to be submitted by the RE bidders – and any amount higher than it shall be automatically disqualified.
Delola added “the bidders will have to bid the full capacity of the plant...the allocation is based on the bid price.”
For the project-developers that will win in the bidding, they will be awarded with 20-year power supply contracts and the delivery of their generated electricity shall be from December 2022 until December 2025. The DOE is targeting contract-award to the winning bidders by June 24.
The RE auction is carried out in compliance to the Renewable Portfolio Standards (RPS) policy enshrined in the Renewable Energy Act - and that takes the form of ‘market incentive mechanism’ to stimulate clean energy investments in the country.
Under the ‘energy transition’ pathway cast by the DOE, the share of RE in the country’s energy mix shall reach 35-percent by 2030; and for it to escalate to 50-percent by 2040.
For the annual increment in the RE capacity tendering, there had been recommendation from the National Renewable Energy Board (NREB) to start with 1.0-percent this 2022; and that shall go up to 2.52-percent by 2023 but that shall be decided correspondingly by the incoming DOE leadership.