The Department of Energy (DOE) has identified transmission and supply availability as key factors that deterred renewable energy developers from participating in the agency’s second Green Energy Auction Program (GEA-2).
Energy Secretary Raphael Lotilla explained that although the private sector did not object to the conduct of GEA-2, their interest dwindled as the auction date approached due to uncertainties.
One of the concerns raised by the private sector was the availability of transmission lines, as the system impact studies conducted by the National Grid Corp. of the Philippines (NGCP) were delayed. These studies assess the capability of transmission lines to absorb new capacities.
The completion of system impact studies usually takes one and a half to two years, which can be detrimental to renewable energy developers who want to offer their capacities.
Low turnout
During the second round of competitive bidding for renewable energy capacities under GEA-2, the DOE received a low turnout, with only 3,580.76 megawatts (MW) of committed capacities, representing around 30 percent of the total available capacity of 11,600 MW.
Renewable energy firms shun DOE’s green power auction
This leaves over 8,000 MW of unsubscribed capacity. However, it is uncertain whether these capacities will be up for rebidding.
Secretary Lotilla emphasized the importance of NGCP completing its transmission projects on time, reminding the company that the pandemic cannot be solely blamed for the delay. The DOE and the Energy Regulatory Commission are currently evaluating NGCP’s performance following the power interruptions experienced in Luzon in May.
Review NGCP franchise, DOE urges Congress
Supply availability
Developers were also concerned about supply availability, particularly for waste-to-energy facilities. The DOE did not receive commitments for this technology.
Lotilla explained that waste-to-energy facility developers need a stable supply of waste to recover their investments over a 15- or 20-year period. Without assurance of a steady waste supply, developers will not risk investing in such facilities.
Lotilla suggested that local government units could assist developers in securing a reliable waste supply.
The DOE plans to conduct focus group discussions with auction participants two weeks after announcing the winning bidders on July 12 to gather feedback and improve the GEA.
-CSN
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