Philippines Receives Nearly 400 Bids for Renewables Development

The Philippines has received 378 submissions for rights to participate in the electricity grid through renewable energy development, in the second such auction in the country with 11,600 megawatts in offer.

The Green Energy Auction is part of government efforts to raise the share of renewables in the coal-dominated energy mix to 35 percent by 2030 and 50 percent by 2050, as set in the Philippines’ Power Development Plan 2020-2040.

Qualified for the auction proper set for June 19 are 339 bids, after evaluation by the GEA awards committee, the Department of Energy (DOE) said in a press release Friday.

Of the 118 participating companies, PHINMA Solar Energy Corp. had the highest number of bids successfully screened, accounting for nearly a third at 110. Corenergy Inc. follows at 38 and Aboitiz Power Distributed Renewables Inc. at 30, according to the result released Thursday. All three are local companies.

“Qualified bidders are expected to post a bid bond amounting to a minimum of PhP 1 million [$17,800) per megawatt”, the regulator said Friday.

Winners must fulfill their installation commitments, distributed across the archipelago’s main island divisions Luzon, Visayas and Mindanao, between 2024 and 2026. The DOE will announce successful bids June 28 after a further evaluation.

“The RE facilities to be set up by the winning bidders will be awarded with 20-year Power Supply Agreements (PSAs) as provided in the Terms of Reference (TOR) of the GEA-2 Program”, the department said in the press release.

The DOE encouraged failed bidders to participate in succeeding auction rounds, which are conducted yearly.

The first GEA awarded 1,966.93 MW of capacities to be delivered 2023 to 2025, as announced by the agency June 27, 2022, posting a success rate of nearly 98.35 percent.

In 2021 the agency issued the framework for renewables development through the GEA, also providing the basis for the benchmark price for distribution utilities.

The GEA “is one of the best ways to accelerate the development of renewable energy systems and the promotion and commercialization of its applications, encourage free and active private sector participation and investment in all energy activities, and provide adequate capacity to meet demand including, reserve requirements”, said the DOE circular dated November 3, 2021 establishing the framework.

The department’s latest available data, released June 20, 2022, showed renewables accounted for 23,771 gigawatt hours (GWh) of the national gross power generation of 106,115 GWh in 2021. Coal remained the biggest contributor at 62,052 GWh, while 18,675 GWh came from natural gas and 1,616 GWh from oil.

In support of the transition to clean energy, the government is shifting away from coal in favor of renewables and natural gas, which is considered less carbon-emitting than other fossil fuels. Coal has been the biggest emitter of energy-related planet-warming emissions, with its contribution rising in 2022 at a rate above the average growth over the last decade to 15.5 metric gigatons according to a report by the International Energy Agency published March 2023.

The DOE has imposed a moratorium on the issuance of licenses for coal-fired plants since October 2020 even before the government joined in 2021 a United Nations global pledge to phase out coal power by the 2040s.

To support supply, besides accelerating renewables development, the DOE has approved seven LNG terminal projects, with two announced last week to have been completed. The projects open up the country to importation as local natural gas production dwindles. Output from the Malampaya field, the only active of just two commercial natural gas discoveries in the Philippines, has consistently dropped since 2019 from 155.49 billion standard cubic feet (Bscf) that year to 113.61 Bscf 2022, according to a DOE update published February 15. Shell PLC late last year completed the sale of its 45 percent operating stake to local company Prime Infrastructure Capital Inc. 

The Philippines has pledged to cut planet-warming emissions by 72.29 percent conditionally and 2.71 percent unconditionally by 2030, or 75 percent in aggregate, its highest reduction target according to its Nationally Determined Contribution deposited to the UN Framework Convention on Climate Change April 15, 2021.

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