Philippines regulator consults on new green energy auctions and tariffs

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Credit: Aboitiz Power

The Philippines' Department of Energy (DOE) has called for comments on a draft programme that brings in new rules for renewable energy auctions and a green energy tariff.

The main aims are to enable compliance with the Renewable Portfolio Standard (RPS) that will be enforced this year. The RPS mandates power firms to have a minimum percentage of their power generation coming from renewables, with penalties for non-compliance. President Duterte has been pushing to reduce the country's reliance on coal while simultaneously aiming to double its power supply by 2030 to support its growing economy.

The draft circular, ‘Promulgating the Rules and Guidelines Governing the Green Energy Tariff Program (GETP) in the Philippines’, considers how the DOE can play a role in helping this RPS compliance by setting certain market mechanisms.

Firstly, the DOE wants to set a framework to facilitate the procurement of renewable energy-based power through a competitive process, hence the plans for a Green Energy Auction. This would be a “mechanism to facilitate contracting by Qualified Suppliers with Eligible Customers through a competitive process or auction”, according to the draft.

Secondly, a Green Energy Tariff would “provide signals on the commercial value of electricity generated from renewable energy facilities”, the draft said. It would also set “the tariff or price cap […] for approval of renewable energy supply to captive customers or regulated entities”.

The DOE would also coordinate with the Energy Regulatory Commission (ERC) to develop methods for setting and updating pricing for long-term contracting of renewable energy supply.

The plans for such auctions and a ceiling price for renewables first emerged in July 2019, with DOE secretary Alfonso Cusi promising 2GW of renewables to be tendered under an auction format.

Stakeholders have until 23 January to respond to the email address here. The draft circular can also be found here.

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