In pursuit of the energy transition goal of the government of the Philippines, the Department of Energy (DOE) issued the Notice of Auction (NOA) on 27 March 2023 inviting all qualified suppliers to participate in the second round of the Green Energy Auction 2 (GEA-2).
The GEA-2 will offer a total capacity of 11,600 MW installation target, with 3,600 MW for 2024, 3,600 MW for 2025, and 4,400 MW for 2026.
The issuance of the NOA triggers the series of activities toward the target GEA-2 in June 2023. The DOE will issue the Terms of Reference (TOR) and the Auction Round Procedures (ARP) twenty (20) days after the issuance of the NOA. On the other hand, and pursuant to the Green Energy Auction Program (GEAP) Guidelines, the Energy Regulatory Commission (ERC) shall also issue the Green Energy Auction Reserve (GEAR) Prices and its methodology thirty (30) days after the issuance of the same.
While the GEA-2 is expected to encourage more investments in power generation, it further pursues to promote the growth of renewable energy (RE) as one of the country’s primary sources of energy by facilitating transparent and competitive selection of RE facilities to support the major goal of the government of attaining energy security through the entry of new capacities in the grid.
Meanwhile, the DOE will revisit the data and the status of various ongoing run-on-river (ROR) hydro projects to enable the determination of the auction capacities for the succeeding GEA rounds, the earliest of which is by the fourth quarter of this year.
The Installation Target of 350 MW under the Feed-In-Tariff (FIT) for ROR hydro remained unsubscribed, with an available capacity of 177.217 MW as of February 2023. Based on the DOE’s coordination with the ERC, they are currently working on the FIT-2 and FIT-3 rates for ROR hydro to enable the completion of the FIT Program.
While the GEA Program was introduced as another market option for RE developers, the DOE finds it more efficient to facilitate the completion of ROR hydro projects under the FIT Program.
The NOA is set to bid out the RE capacity of 7,715 MW in Luzon, 2,695 MW in Visayas, and 1,190 MW in Mindanao from 2024 to 2026.
The GEAP was designed to continuously trigger the increase of RE capacity in the country, which will help realize the government’s target of 35% RE in the energy mix by 2030 and 50% by 2040.