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Manila Bulletin devider Philippines devider National devider 21 service contracts of Solar Philippines up for termination, DOE tells Estrada

21 service contracts of Solar Philippines up for termination, DOE tells Estrada

Published Oct 10, 2024 03:35 pm

At A Glance

  • Senate President Pro Tempore Jinggoy Estrada learns that a total of 21 service contracts awarded by the Department of Energy (DOE) to Solar Philippines are in the process of termination.

A total of 21 service contracts awarded by the Department of Energy (DOE) to Solar Philippines are in the process of termination.

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Senate President Pro Tempore Jinggoy Ejercito Estrada asks questions during the Finance Subcommittee E briefing held on Wednesday, October 9, 2024. Estrada not only endorsed the department's budget allocation but also took the opportunity to inquire about the country’s progress in renewable energy development. He specifically requested updates on the growth of the solar energy sector and its potential contributions to addressing the nation’s energy requirements. (Senate PRIB photo)

Thus, bared the DOE during the Senate finance subcommittee hearing on the agency’s 2025 budget after Senate President Pro Tempore Jinggoy Estrada asked about the company's compliance with its energy commitments after getting service contracts from the government. 
 
“Twenty-one of the contracts are already being processed for termination because they are not able to deliver the scheduled targets of the work program,” Energy Undersecretary Rowena Cristina Guevara said during the hearing.
 
Estrada said a total of 473 service contracts had been awarded to various renewable energy companies to build solar farms as of last March. These were supposedly for 32,359 megawatts (MW) of renewable energy (RE) supply.
 
The senator said that of the 10,000 megawatts committed by Solar Philippines and its affiliates, only 174.41 megawatts, or two percent, have been completed and started commercial operations. 
 
“The vast majority equivalent to 96 percent of the total commitment have not yet entered the development stage and remain in various phases of pre-development. How will this affect the department's targets?" Estrada asked DOE. 

These included the Iba-Palawig project, the Iba-Palawig 2 project, and the San Marcelino phase 3 project. 
 
Guevarra said the most challenging part of building power facilities was the acquisition of land, whether by lease or purchase.
 
“Previously, possessory rights were not required when we issued service contracts. However, under the new guidelines, developers must have possessory rights before service contracts are granted," she said.
 
Guevara said of the 32,359 MW covered by service contracts, other developers have already fully developed or are in development of 22,000 MW of capacity.
 
Senators Pia Cayetano and Sherwin Gatchalian also echoed the sentiments of Estrada, and questioned the delays in the commitments stated in service contracts. 
 
Guevara said the DOE would issue new sets of terms of reference for its succeeding green energy auctions with the performance of RE developers as qualifying conditions.
 
“We are going to be issuing the terms of reference soon. The performance or non-performance of projects will be included,” Guevara said.

Related Tags

Department of Energy (DOE) Solar Philippines Senator Jinggoy Estrada
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