An official of a local renewable energy (RE) firm urged government to consider adjusting rates of the Green Energy Auction (GEA) program following the low turnout of participants in its second iteration conducted this year.
Tetchi Cruz-Capellan, chief executive officer of Sun Asia Energy which is a member of the Philippine Solar and Storage Energy Alliance (PSSEA), said the Energy Regulatory Commission’s (ERC) price cap for the GEA-2 is “way below the current market realities.”
“We urge ERC to seriously examine the tariff rates in the GEAP. The rates are not reflecting the realities of the current demand and supply of electricity in the country, nor it is encouraging developers to build. The framework of the auction is to set a price cap and bid below the price cap. It seems, however, that the regulators are setting a floor price,” Capellan said in a text message.
She said PSSEA submitted studies and actual references that can improve GEA’s tariff structure but “failed to convince” the regulatory body.
“We believe that for the industry to deliver the ambitious target of the President, there has to be an honest-to-goodness realization of the current market prices. Without this, future GEAP will fail to entice developers,” Capellan said.
“We are hopeful that ERC will listen to the developers and seriously consider what the market is telling them – that their price cap is way below the current market realities,” Capellan added.
Only 30.9 percent or 3,580.76 megawatts (MW) of RE capacities out of the 11,600 MW made available by the Department of Energy (DOE) under the second GEA or GEA-2 program received bids from interested developers.
The ERC pegged the prices for GEA-2 at P4.4043 per kilowatt hour (kWh) for ground-mounted solar, P4.8738 per kWh for rooftop solar, P5.3948 per kWh for floating solar, P5.8481 per kWh for onshore wind, P5.4024 per kWh for biomass and P6.2683 per kWh for biomass waste-to-energy.
