More bidders for geothermal, hydro contracts seen this year

MANILA, Philippines — The Department of Energy (DOE) expects more companies to bid for hydropower and geothermal contracts in the open and competitive selection process (OCSP 3) in support of the country’s clean energy transition.

“This initiative which aims to advance renewable energy development and utilization is consistent with our effort towards achieving energy security as well as balanced energy mix in the country,” DOE assistant secretary Robert Uy said during the virtual launch of OCSP3.

Under the third round, the DOE identified five geothermal areas with a combined capacity of 87 megawatts (MW) and 17 hydropower areas with a total of 65.4 MW capacity.

Uy said the OCSP3 was well received by stakeholders during the agency’s online consultations last year.

“We have obtained encouraging results from the series of online stakeholders, consultations undertaken in July 2020 and that we are very optimistic,” he said.

In the previous OCSP, a total of 21 predetermined areas were offered, four of which are geothermal sites with aggregate potential capacity of up to 134 MW and 17 are hydropower sites with capacity of up to 733.4 MW.

The agency only received eight offers for two geothermal concession areas and 31 proposals for 14 hydropower deals in May the same year.

OCSP3 is envisioned to help the country move forward and achieve renewable energy goals, with the support and cooperation of stakeholders, Uy said.

“The Department of Energy cannot do this alone. This OCSP3 is one of the many initiatives that we have which would help unlock the country’s renewable energy potential. Let us work together,” he said.

In the same event, DOE-Renewable Energy Management Bureau (REMB) director Mylene Capongcol said the agency expects a lot of bids and interest from energy stakeholders with various renewable energy (RE) policies put in place.

“There will be a lot of opportunities in the coming months for the RE developers as we start to implement and enforce the RE policy mechanisms,” she said.

These policies include the renewable portfolio standards (RPS) for on-grid and off-grid areas, the green energy option program (GEOP) and net metering.

Under the RPS, power players are prescribed to source a percentage of electricity requirements from RE sources.

The GEOP is a mechanism where electricity end-users are given the option to choose RE as their preferred source of energy.

Meanwhile, the net-metering program enables an ordinary electricity consumer to become a “prosumer,” where the consumer generates electricity for its own consumption, as well as sell any excess generation to the distribution grid.

“We’re now transitioning into a clean energy scenario for the Philippine power sector,” Capongcol said.

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

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