Green energy auction set to start by June ’21

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    The National Renewable Energy Board (NREB) will hold the first round of the green energy auction by June 2021.

    Under the green energy auction, a special incentive rate for renewable energy projects will be introduced and auctioned off based on power plants’ ability to run power either as peaking or mid-merit capacity.

    A ceiling will be imposed and the player with the lowest rate will secure the incentive.

    Developers will not be given a deadline to fill up the entire allocated capacity that is currently set at 2,000 megawatts (MW).

    “The green energy auction committee has convened two weeks ago… the first meeting of the committee to set out the work plan for the first auction scheduled by June 2021. CREZs (competitive renewable energy zones) play a big role not just for the capacity but definitely for the location,” said Monalisa Dimalanta, NREB chairman, in an online briefing yesterday.

    Dimalanta said the committee is eyeing the possibility of increasing the initial 2,000 MW capacity following the release earlier this year of the findings of a CREZ study the huge potential of RE developments against projected power demand.

    Up to 380 MW of solar energy assets and up to 100 MW of biomass power that failed to qualify for the feed-in-tariff (FIT) may be given another shot to enjoy incentives through the pricing auction program.Said projects were stranded as they were developed based on a business model reliant on the FIT. They are not operational in the absence of incentives.

    CREZs are areas ideal for RE development where generation development obstacles such as transmission access, energy curtailment, land permitting and regulatory barriers are easier to overcome there.

    The study released by the Department of Energy together with the National Renewable Energy Laboratory, the National Grid Corporation of the Philippines and the United States Agency for International Development showed at least 807,870 MW RE projects can be located in CREZs.

    The study said majority of the RE potential in CREZs are in Mindanao at 408,293 MW, followed by Luzon with 360,244 MW and Visayas with 39,333 MW.

    Meanwhile, the most abundant resource according to the study is hydroelectric power with 655,034 MW trailed by wind with 93,987 MW, solar with 58,110 MW, biomass with 374 MW and geothermal with 365 MW.

    As of end-2019, the country had a total installed on-grid capacity of 25,531 MW, 7,399 MW of which are from RE sources comprised of hydro, geothermal, wind, biomass and solar as coal remained the top power source with a share of 10,417 MW.