DOE awards 19 contracts to various RE developers

MANILA, Philippines — The Department of Energy (DOE) has awarded 19 contracts to various renewable energy (RE) developers after conducting the first round of the Green Energy Auction Program (GEAP) earlier this month.

Of the winning bidders, Solar Philippines bagged 70 percent of the total RE capacity and 91 percent of the total solar capacity auctioned off, while Sta. Clara Group secured the most number of hydropower contracts.

In a Viber message, Energy Secretary Alfonso Cusi said the conduct of the first round auction for RE under the GEAP was a success, having successfully generated almost 2,000 megawatts (MW) of RE capacities that were committed to deliver energy from 2023 to 2025 at a competitive price lower than or equal to the GEAR Prices set by the ERC.

“As to why some target capacities are not filled up, there may be factors that qualified bidders decided not to offer their capacities. Nonetheless, the target 2000-MW, was attained.  DOE plans to conduct GEA annually,” Cusi said.

In the notice of award posted on its website, the DOE awarded two hydropower contracts totaling 80 megawatts (MW), five solar contracts totaling 1,070 MW, and four wind contracts totaling 360.8 MW in Luzon.

Hydropower and wind were fully subscribed while solar overshoot its target capacity by 80 MW. There were no contracts awarded for biomass, which had a target capacity of 60 MW.

Winners for hydropower contracts were Cordillera Hydroelectric Power Corp. for its 60-MW Kapangan Hydroelectric Power Project and Hedcor Inc. for its 20-MW Sablan 1 Hydroelectric Power Project.

Among the companies that bagged solar contracts were PAVI Green Renewable Energy Inc. for its 40.4-MW Naga Solar Power Plant, Greenergy Solutions Inc. for its 99.98-MW Talugtug Solar power project, Solar Philippines Commercial Rooftop Projects Inc. for its 200-MW Concepcion Tarlac 2 Solar Power Project and 450-MW Tayabas Solar Power Project, and Solar Philippines Nueva Ecija Corp. for its 280-MW Santa Rosa Nueva Ecija 2 Solar Power project.

The four companies declared winners for wind are Amihan Renewable Energy Corp. for its 70-MW Caparispisan II Wind Power Project, Solar Philippines Calatagan Corp. for its 30-MW Calatagan Wind Power Project, Bayog Wind Power Corp. for its 160-MW Balaoi and Caunayan Wind Power Project, and CleanTech Global Renewables Inc. for its 100.8-MW Kalayaan 2 Wind Power Project.

In Visayas, the DOE only awarded two RE contracts from the auction—one solar and one wind.

Solar Philippines Visayas Corp. secured a contract for its 300-MW Kananga-Ormoc Solar Power Project while Petrowind Energy Inc. clinched a contract for the 13.2-MW Nabas 2 Wind Power Project.

The solar capacity was oversubscribed by 40 MW while there was a shortfall of 6.8 MW for the wind capacity.

In Mindanao, the DOE awarded four hydropower contracts and one each for biomass and solar.

For hydropower, Philnewriver Power Corp. bagged two contracts for its 3.7-MW Malitbog and 3.7-MW Silo-O Hydroelectric Power Projects while Philnew Hydro Power Corp. snatched two contracts for its 4.85-MW Mat-I 1 and 6.9-MW Clarin Hydroelectric Power Projects. Both companies are part of the Sta. Clara Group.

Cotabato Sugar Central Company Inc. secured a contract for its 3.4-MW biomass cogeneration plant while Solar Philippines Commercial Rooftop Projects Inc. clinched a contract for its 120-MW General Santos Solar Power Project.

The combined 19.15-MW hydropower contracts did not meet the 50-MW target set for the technology in the region while biomass had a 46.6-MW deficit. On the other hand, the solar technology was oversubscribed by 20 MW.

In the notice,  Cusi said the winning bidders were ranked based on their offers from the lowest to highest bid price and stacked corresponding to the respective RE technology per grid.

All winning bidders were directed to submit to the agency the original copy of their respective affidavit of undertaking and the corresponding performance bond within 35 and 60 calendar days.

Cusi said the country’s first green energy “is a significant step in encouraging more power generation investments in renewable energy, while protecting the interest of Filipino consumers - a testament to the country’s commitment to developing indigenous and clean sources of energy at competitive prices.”

The agency said the success of this competitive process will set the benchmark for the future auction rounds, as the resulting Green Energy Tariff   will reflect the value of electricity.

Last month, the Energy Regulatory Commission (ERC) set the ceiling rate for the first round of GEAP, with the Green Energy Auction Reserve (GEAR) price for solar at P3.6779 per kilowatt-hour (kWh), wind at P6.0584 per kWh, biomass at P5.0797 per kWh, and run-of-river hydro at P5.4913 per kWh.

Through the GEAP, the DOE paved the way for immediate and timely investments; supported the development of, and increased financing access for new or additional capacities under a competitive process; as well as implemented programs that promote environmental sustainability, which will aid the country’s transition to  RE.

The program will also provide substantial support to the mandated participants of the Renewable Portfolio Standards (RPS) Program to ensure compliance with their minimum RPS requirements since the GEAP is perceived to trigger the increase of RE capacity in the country, which will help the government attain its energy transition goals.

RPS is a mechanism under the RE Act of 2008 where distribution utilities,  electric cooperatives and retail electricity suppliers are prescribed to source a percentage of electricity requirements from RE sources. Currently, the RPS level is currently set at one percent until 2022.

The DOE said the GEA would be conducted on a yearly basis, allowing RE developers which were not able to participate in last week’s auction to file their intent in the succeeding rounds.