The low turnout in the recently-concluded second Green Energy Auction (GEA-2) administered by the Department of Energy (DOE) was largely blamed to the unresolved concern of grid integration of the targeted renewable energy (RE) installations. This was affirmed by Energy Secretary Raphael P.M. Lotilla, as he reiterated the endless rancor of both local and foreign investors on recurring delays when it comes to the issuance of system impact study (SIS) for RE projects. The other major deal-killer was concern on cut-rate reserve prices. “The availability of transmission lines was a concern raised because the system impact studies (SIS) are delayed,” the energy chief said. System impact study refers to an engineering study that the grid operator must carry out to ensure that the connection or the wheeling of generated capacity from a power plant development could be safely and reliably accommodated into the load network of the country’s transmission system. On top of that, timely completion of transmission facilities to underpin RE capacities buildup must also be guaranteed. “The waiting time right now is ranging from 1.5 years to 2.0 years – so if you have to wait that long before you can even be given a go-signal, then it can be a detriment to those who would like to be able to offer their capacities on renewable energy,” Lotilla stressed. In the case of the foreign investors, it was hinted that many had been dissuaded from joining GEA-2 “because of the very short preparation timeframe for the bids allocated by the DOE.” Other bidders also conveyed uneasiness they went through because in the afternoon prior to the bidding date on July 3, their user-specific IDs for the online bidding system had not been issued yet by the energy department, hence, they are also batting for a systematic approach on that. According to a source from a foreign company that had initial high interest on joining the bidding, “the delay in the release of the GEAR (green energy auction reserve) prices failed to give us enough time leeway to firm up our bids because that was just issued roughly two weeks before the bid submission deadline; so there was not even a time left for us to secure the go-signal of our principals. So we’re really hoping that the timelines in the next contracting rounds will be adjusted.” On what were generally deemed as low GEAR prices, several investors noted that based on their assessments and tariff comparisons, the price of power supply agreements (PSAs) they can corner) in the retail electricity supplier (RES) market would be more attractive at this point compared to committing their capacities in the DOE-administered RE capacity tendering. Additionally, some project developers reckoned that the prevailing high prices in the Wholesale Electricity Spot Market (WESM) – at more than P7.00 per kilowatt hour (kWh) on average – emerge to be a more enticing option that they can explore, especially for RE projects that will be coming on commercial stream in the immediate term. Based on feedbacks being laid down by investors, Lotilla asserted “we recognize here that the markets have spoken, that in terms of the attractability of the auctions based on the maximum price that was approved by the ERC, the bids were one-third of the volumes that were made available…we are going into focus group discussions with the private sector – because at the time that we announced the bids, not only that there were no objections but it was welcomed especially by the private sector.” The energy chief, nevertheless, qualified that “as the bidding date drew closer after the announcement of the GEAR prices by the ERC and the bid bond requirements, and so on, the level of interest dwindled.” Lotilla similarly highlighted the lack of bidders for waste-to-energy (WTE) facilities due to uncertainties on feedstock availability. In his view, this is a matter that could be resolved with the help of local government units (LGUs) that will be hosting these projects in their communities. “If one puts up a waste-to-energy facility that will be able to recover its investment over 15- or 20-year period, they would need stable supply of waste. But if the supplied waste is not going to be assured to them, then they’re not going to risk investment,” he stated. On a more favorable note, former Energy Secretary and Alternergy Chairman Vincent S. Perez professed that based on his company’s experience, the DOE had “well-organized conduct of actual bidding process during this second round of auction by allowing correction of bid application documents prior to final pre-qualification evaluation and implementing very transparent pre-bid and actual auction process.” The former energy chief likewise sounded off his support on the DOE’s plan to hold “discussions with the auction participants regarding the unsubscribed capacity.” He emphasized “I fully support this move and call on the renewable energy industry players to join in this dialogue to address earlier concerns raised on transmission connection and permits processing among others, to ensure that the project capacities offered are delivered according to more realistic timelines and within competitive power rates.”