The Department of Energy (DOE) is scheduling fresh round of green energy auction (GEA) by the fourth quarter this year to cover the unsubscribed capacity in the last competitive bidding - and the distinctive feature of the forthcoming tender will be on packaging it as integrated renewable energy and energy storage system (IRESS).

“In the coming months, the DOE shall release the indicative timeline of the GEA-4 activities through the issuance of the notice of auction (NOA),” the department stipulated.

As explained by the DOE, the IRESS is touted as “comprehensive energy solution that combines renewable energy technology with energy storage systems (ESS).”

Within that frame, the variable RE technologies will have to draw technology support from energy storage facilities like batteries, flywheel or even pumped storage hydropower systems, so they can thrive as a more reliable source of power for the country.

Most of the energy storage systems on commercial rollout in the markets today are the four-hour storage configuration, but more mature markets are already looking at the deployment of long duration energy storage (LDES) systems.

There are no details laid down by the DOE yet on the terms of reference (TOR) for the auction, but it previously hinted that the chunk on offer will account for the capacities not taken in the 2nd GEA undertaking last year.

To recall, investor-response in that bidding round had been less than desired, as interested parties generally blamed perceptively low reserve prices set by the Energy Regulatory Commission (ERC) as well as the short preparation timeframe on the part of the DOE on the weak outcome.

The integration of energy storage system in the next GEA is seen as an improvement, because some investors are also looking for RE investment-enabled replacement cash flow if they will have to advance the retirement of their coal fleets.

“By combining renewable energy (RE) and energy storage, IRESS enhances the stability and reliability of the energy system, enabling a more consistent and efficient supply of power,” the DOE stressed.

Nevertheless, the department emphasized that in collaboration with development partners, it is still at the process of “studying the design and economic viability of IRESS.” No specific timeframe had been given on the study completion.

Apart from RE auction, the DOE also  divulged that it will be bidding capacity drawn from liquefied natural gas (LNG), as a support to the variability of renewables - although the parameters are not exactly clear at this point.

“With the anticipated high entry of renewable energy (RE) into the grid resulting from the GEA, the DOE is considering LNG technologies for the upcoming GEA-4,” the department indicated.

Typically, prospective bidders will need longer lead time to assess market risks and evaluate the commercial viability of the tariffs tied to the power supply agreements to be awarded under GEA – and this is primarily critical to companies that have foreign principals.