The Department of Energy (DOE) has issued notice of awards (NOAs) to 105 winning bids in the second round of green energy auction (GEA-2), an exercise that partly fulfills the country's renewable energy (RE) development roadmap.

The winning project-developers will be awarded with 20-year power supply agreements (PSAs) and warranted capacity deliveries from their facilities are scheduled by 2024, 2025 and 2026, as decreed under the GEA-2 terms of reference.

For ground-mounted solar capacities, the winning bidders were: Nuevasol Energy Corp., Megasol Energy Inc., Citicore Solar Tarlac 1 Inc., Citicore Solar Tarlac 2 Inc., Greencore Power Solution 2 Inc., Citicore Solar Pampanga 1 Inc., Citicore Solar Quezon Inc., Citicore Solar Pangasinan Inc., and Citicore Solar Pangasinan 2 Inc. for Luzon grid. The generated capacities would be for 2024 delivery.

The capacities due on stream by 2025 will come from: Labrador Green Energy Corp., Liberty Solar Energy Corp., Wyn Power Corporation, Solar Valley Energy Solutions Inc., Greenergy for Global Inc. (G4G), San Pablo Renewable Energy Corp., BKS Green Energy Corp., and PetroGreen Energy Corporation for Luzon grid; and Enfinity Philippine Renewable Resources Third Inc. for the Mindanao grid.

On 2026 deliveries, this will come from: Opus Solar Energy Corp., Ixus Solar Energy Corp., Solar Valley Energy Solutions Inc., Solar Philippines Commercial Rooftop Projects Inc., Energy Logics Philippines Inc., and Xyris Energy Corporation for Luzon grid; Joy-Nostalg Solaris Inc., Apolaki Eight Inc., Citicore Solar Negros Occidental 2 Inc., Citicore Solar Cebu Inc., and Citicore Solar Negros Occidental Inc. for the Visayas grid; and Apolaki Seven Inc. for the Mindanao grid.

For roof-mounted solar installations, it was a grand slam win for Phinma Solar Energy Corporation across Luzon, Visayas and Mindanao grids and capacity-deliveries will be 2024 and 2025.

The winning bidder on the floating solar development space is NKS Solar One Inc. for 90 megawatts (MW) capacity that is slated for delivery in 2026.

Developers that cornered winning contracts for onshore wind farm projects were: Alternergy Tanay Wind Corporation, Rizal Wind Energy Corporation in the Luzon grid with commercial-capacity deliveries in 2025; then 2026 deliveries will be from Quezon Wind Energy Corp., Cornerstone Energy Development Inc., Citicore Wind Energy Corporation, and Giga Ace 6 Inc. also for Luzon grid; and Citicore Wind Energy Corporation, Gemini Wind Energy Corp. and FirstMaxPower International Corporation for the Visayas grid.

The DOE directed that “the winning bidders are required to submit their post-auction documents within sixty (60) calendar days from the date of posting of the ‘notice of award’ or until September 10, 2023 as prescribed under the applicable Terms of Reference” emphasizing that “noncompliance with the requirements shall result in the cancellation of the award and forfeiture of the bid bond.”

There were no winners for biomass and waste-to-energy facilities, hence, these are expected to be included in the next round of RE auctions to be administered by the energy department.

From the outcome of the last bidding, only 3,440MW had been cornered by the winning bidders. This was way below the 11,600W that the energy department had originally programmed in the tender process.

“More than half of the winning capacity committed is from ground-mounted solar with a total of 1,878.982MW while 9.390MW, 90MW, and 1,462.384MW are from rooftop solar, floating solar, and onshore wind, respectively,” the DOE conveyed.

The price settlements that the qualified developers can receive for capacities delivered will be based on their bids, which had been anchored on the green energy auction reserve (GEAR) prices that had been set per technology by the Energy Regulatory Commission.

The payments to the RE sponsor-firms will be collected from all Filipino consumers; and it will form part of the pass-on rate under the feed-in-tariff allowance (FIT-All) component in the electric bills. The fund collection is administered by the National Transmission Corporation.

Several investors raised an array of concerns on their decision to backpedal from joining the auction such as: the "relatively low" GEAR prices prescribed by the regulator; the largely unresolved predicaments on grid integration; the very short preparation time allotted by the DOE on bid preparation; and others failed to comply with bid bond requirements.

To address drawbacks from the last auction, the DOE indicated that it will carry out "focus group discussion" with the bidding participants.

To compare RE tariffs with ASEAN-neighbor Vietnam though, it is worth noting that the last feed-in-tariff (FIT) it enforced for wind farm projects that came on-line after December 2021 had been at equivalent P3.74 per kWh or $0.068/kWh which is lower than the ERC-enforced GEAR for this technology at P5.8481 per kWh.

While for ground-mounted solar, Vietnam’s FIT is at equivalent P2.81 per kWh or $0.051 per kWh versus GEAR in the Philippines at P4.4043 per kWh.

For floating solar, the FIT in Vietnam is at equivalent P3.58 per kWh or $0.065 per kWh versus P5.3948 per kWh in the Philippines.

Vietnam has also prescribed a FIT equivalent of P4.30 per kWh or $0.078 per kWh for offshore wind farm developments while pricing on this investment sphere has yet to be decided by the DOE.

As things stand today, foreign investors have been sounding off their preference to go to Vietnam despite the imposition of lower tariffs for their auctioned RE capacities because the risks are reportedly easier to manage, primarily the tricky processed of project permitting.

Concerns of corruption across host-local government units in the Vietnamese energy market are also deemed not as prevalent and their officials implicated for such acts still have the decency to resign, while bureaucratic complexities in the Philippines are extremely difficult to manage and understand.