DOE defers award of RE contracts

MANILA, Philippines – The Department of Energy (DOE) rescheduled the awarding of renewable energy (RE) contracts auctioned under the second open and competitive selection process (OCSP 2) to this year, a ranking official said.

“It’s already the holidays so awarding will be this year,” DOE Renewable Energy Management Bureau director Mario Marasigan said in a text message to The STAR.

He cited “difficult evaluation and good offers” as reasons for the longer-than-expected evaluation process.

Last February, the DOE offered 21 RE sites under OCSP 2, four of which are geothermal sites with aggregate potential capacity of up to 134 megawatts (MW) and 17 are hydropower sites with capacity of up to 733.4 MW.

The DOE received in May eight offers for two geothermal concession areas and 31 proposals for 14 hydropower deals.

Awarding was originally set in September last year.

The geothermal power projects are located in Balut Island in Davao Occidental province, Amacan in Compostela Valley, Cabalian in Southern Leyte and Acupan in Benguet.

As for the 17 hydropower sites, six are located in Luzon, eight in the Visayas, and three in Mindanao.

Under the contract, the winning bidders will have two years for pre-development for less than 50 MW and five years for at least 50 MW. 

The contract also covers a 25-year development stage, which can be renewed for another 25 years.

Winning bidders will also benefit from perks under RA 9513, or the Renewable Energy Act of 2008, such as a seven-year income tax holiday (ITH), reduced corporate tax rate of 10 percent after ITH expires, and duty-free importation for 10 years of equipment, machinery, spare parts and materials directly, actually and exclusive used for hydropower or geothermal operation.