Green energy auction 2nd round due in June

THE Department of Energy (DoE) said it hopes to have 11,160 megawatts (MW) worth of renewable energy (RE) available in the next few years, with a second round of auctions due in June for some of that capacity coming online in 2024 under its green energy auction program (GEAP).

“The GEA Program intends to provide an additional market for RE through competitive electronic bidding of RE capacity,” Rowena Cristina L. Guevara, DoE undersecretary, said during the Philippine Electric Power Industry Forum 2023 on Monday organized by the Independent Electricity Market Operator of the Philippines (IEMOP).

Ms. Guevara said the first round of the GEA was conducted in 2022, resulting in volume of about 2,000 MW.

“Compared to the first auction or GEA-1 last year, we are more aggressive this year and we are looking for RE developers who have ready capacity by next year,” Ms. Guevara said.

The GEAP aims to promote RE as a primary source of energy through competitive selection of RE output.

Of the 11,610 MW, 3,590 MW is targeted for installation in 2024. Luzon accounts for 2,400 MW, followed by the Visayas with 860 MW and Mindanao 330 MW.

These renewable sources include ground-mounted solar, roof-mounted solar, onshore wind, and biomass.

By 2025, Ms. Guevara said that installation target is about 3,630 MW, with Luzon accounting for 2,325 MW, the Visayas 940 MW, and Mindanao 365 MW.

By 2026, Ms. Guevara said the installation target is about 4,390 MW, with Luzon accounting for 2,990 MW, the Visayas 905 MW, and Mindanao 495 MW.

Ms. Guevara also said that the DoE is set to conduct GEA-3 by the fourth quarter of 2020 for geothermal and impounding hydropower.

“In preparation for this, we are collaborating with development partners for technical assistance, specifically in developing auction guidelines and a policy on settlement and payment through WESM (Wholesale Electricity Spot Market),” she said.

Ms. Guevara said the Energy department now projects a total of 15 yellow alerts on the Luzon grid, up from the department’s earlier projection of 12 yellow alerts.

“Before we have only projected 12 yellow alerts in Luzon but we have projected new yellow alerts because of delayed power plants, but this may change once the MVIP (Mindanao-Visayas Interconnection Project) is operational,” she said.

Ms. Guevara said that the commercial operation of WESM Mindanao and the MVIP will improve the reliability of electric power supply not only on the Mindanao power grid but also on the Luzon and Visayas grids.

The DoE is also planning to launch a unified WESM once the MVIP is fully operational.

The MVIP is a crucial transmission project that will link the electricity grids of Visayas and Mindanao.

The P52-billion MVIP is expected to be completed by the end of June, with initial energization to start this month.

Energy Regulatory Commission (ERC) Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that once the grids are connected the price for the unified WESM will be determined.

“Once grids are connected, there will only be one price,” Ms. Dimalanta said.

The spot market is where the power industry buys power when its long-term supply agreements are insufficient.

The ERC is also hoping to complete the review of the secondary price cap by the third quarter.

“Maybe by the third quarter. We are not rushing this because of the summer months,” she said on the sidelines of the energy forum.

She said that the adjustment of the secondary price cap which currently stands at P6.245 per kilowatt-hour (kWh) upon breach of a P9 per kWh rolling average of the generator-weighted average price for a three-day period will potentially lower electricity rates by attracting more investors to the energy industry.

“More investors will hopefully lead to more competition in the market and more capacity available for supply. Competition is viewed as the way to yield better prices in our deregulated generation sector. More capacity will also mean less instances of thin margins and less price volatility especially if new capacity comes from indigenous and/or renewable energy sources,” Ms. Dimalanta told BusinessWorld via Viber. — Ashley Erika O. Jose