New tech to shape next green auction

MANILA, Philippines — Renewable energy industry players expect new technologies to shape the country’s next green energy auction, with the inclusion of solar storage hybrid technology among those being pushed.

“Solar storage hybrid should ideally be included in the next GEAP (Green Energy Auction Program) as this will help address grid constraints, as well as encourage distribution utilities to procure GEAP capacity because it enhances the reliability of GEAP as a source of supply,” according to ACEN president and CEO Eric Francia.

Francia said solar storage hybrid cost would depend a lot on battery storage prices, which are in flux.

“At the end of the day, solar storage hybrid should be compared to the alternative, which is gas,” he said.

Francia said that at current global LNG prices, mid-merit gas would cost around P8 per kilowatt hour, but this could be subjected to significant price volatility due to forex, fuel prices and supply chain considerations.

“Solar storage, on the other hand, has mostly fixed cost and harnesses indigenous and clean energy. This ensures energy security and protects customers from price volatility,” he said.

Renewable energy industry leaders also believe that the next GEAP promises to feature larger capacities from new technologies such as floating solar.

Floating solar, for one, is expected to figure prominently in future auctions.

“Supplying power to Metro Manila and Laguna requires gigawatt of power, which needs thousands of hectares not readily available to developers. Using the lake surface for solar energy provides a clear pathway in realizing the energy security and decarbonization goals of the country,” according to SunAsia president Theresa Capellan, who is also the chair of the Philippine Solar and Storage Energy Alliance (PSSEA).

However, one of the main reasons for the under-subscription seen in the second round of the government’s green energy auction held last month was the low reserve price, especially for the various solar technologies.

The PSSEA had previously asked the Energy Regulatory Commission to consider a tariff of P7.3661 per kilowatt-hour for floating solar tariff, but the final ceiling price under the GEAP 2 was set at P5.3948 per kWh.

“The tariff on floating solar is a good start as it already differentiates the economics with land based. But for the country to harness the potential of the lake, which is located at the back door of Metro Manila and Laguna, the Green Energy Auction Reserve price for floating solar has not yet captured the true cost of this emerging technology,” Capellan said.

“We look forward to working with the regulators in arriving at industry standards worldwide,” she said.

Francia, for his part, said large-scale solar is more expensive in the short term, but improves over time as it gets further scale.

“Building large-scale solar is supposed to benefit from economies of scale, but the reality is that large-scale solar requires significant upfront infrastructure investments, such as roads and civil works, high-voltage transmission line and sub-station,” Francia said.

“To reach our renewable energy goals, the country needs large-scale projects and the upfront costs need to be reflected in the tariff setting,” he said.

Developers of Renewable Energy for AdvanceMent (DREAM) president Jay Layug said floating solar projects from companies like ACEN and SunAsia are a welcome development given the scale of these projects.

ACEN and SunAsia last week signed their renewable energy contract area utilization agreements with the Laguna Lake Development Authority (LLDA) for their respective floating solar projects in the Philippines’ largest freshwater lake.

“This is a very welcome development given the significant scale that floating solar offers. We have been pushing LLDA to finally formally issue the awards since the bidding process was completed last year,” Layug said.