Differentiated pricing for waste-to-energy projects pushed

At a glance

  • Investments on waste-to-energy facilities will not just address deep-rooted pollution problems at overflowing landfills, but will also help pull the plug on the energy challenges of the country.

The Energy Regulatory Commission (ERC) is considering to enforce a "differentiated pricing" for the waste-to-energy (WTE) capacities to be offered under the Green Energy Auction (GEA) program of the government.

ERC Chairperson Monalisa C. Dimalanta admitted that the issuance of green energy auction reserve (GEAR) price for WTE installations will encounter some delays, because the appropriate method to be used on rate calculations is still being deliberated within the regulatory body.

“There are various technologies for WTE and each would have its own cost structure, so it may not be fair to just set one price,” she said.

The ERC chief expounded “we may end up doing differentiated pricing, but that is taking up time,” with her noting that even the workload of the Commission may also be multiplied.

As defined, differentiated pricing entails setting rate variations for the same type of technology – and the costs’ disparity could be drawn either on the use of feedstock, technology application or other factors related to the process of extracting energy from a resource.

Under the GEA-2 notice earlier issued by the Department of Energy (DOE), there is a target to offer 30 megawatts of WTE facilities in the Luzon grid; and the electricity to be generated from proposed projects would be slated for delivery to the grid by year 2026.

According to industry experts, the various WTE installations that investors could set up in the country would include those on anaerobic digestion (AD) facilities that could convert organic wastes into biogas; energy production through the use of wastes from landfills; as well as the application of pyrolysis and gasification technologies which will then convert wastes into synthetic gas (syngas).

The Philippines is regarded as an ideal investment place for WTE facilities because of the massive landfills that proved to be a tough dilemma for most local government units (LGUs) to manage or get rid of in their respective communities.

Additionally, overflowing landfills have been contributing to the country’s worsening pollution and water contamination problems; as well as overall degradation of the environment.

Should the wastes be turned into valuable energy resource, the Philippines will not only be able to monetize those languishing garbage or refuse in landfills, but it would also be able to generate additional power capacity to underpin consumers needs or to fuel economic activities in the country.

In other markets, energy produced from organic wastes had been generally used by their public transport sector – including the trucks that have been transporting basic goods.

For the Philippines, investors have been batting for viable policies and regulatory frameworks that will support their decisions for capital outlay in the sector; and one of these will be the pricing of energy that shall be generated from WTE technologies.