THE Department of Energy (DoE) blamed the weak results of its second Green Energy Auction (GEA) on concerns about transmission lines available for the projects, with developers also lukewarm towards the reserve prices on offer.
“At the time that we announced the bids, not only were (there) no objections but (the GEA) was welcomed by the private sector,” Energy Secretary Raphael P.M. Lotilla said at the Pandesal forum on Wednesday.
On Monday, the DoE announced that GEA-2 resulted in bids for 3,580.76 megawatts (MW) of renewable energy capacity, well below the target of 11,600 MW.
“We recognize that the markets have spoken that in terms of the attractiveness of the options based on the maximum price that was approved by the ERC (Energy Regulatory Commission), the bids were one-third of the volumes that were made available,” Mr. Lotilla said.
In a statement, Theresa C. Capellan, president of SunAsia Energy, Inc. and chairperson of the Philippine Solar and Storage Energy Alliance, said that the ERC must revisit the tariff rates set for the GEA program.
“The rates are not reflecting the realities of the current demand and supply of electricity in the country, nor is it encouraging developers to build,” Ms. Capellan said.
ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said the Commission is determined to find a solution that satisfies investors while protecting consumers.
“We have and continue to value (developer) inputs to the price-setting exercise for the GEA. I look forward to learning, for example, why those who submitted bids found the rates viable while others did not,” Ms. Dimalanta said in a Viber message.
Mr. Lotilla said that the availability of transmission lines was one of the other concerns raised with the system impact study experiencing delays.
The system impact study is conducted by the National Grid Corp. of the Philippines. It aims to assess whether the transmission system can absorb new capacity.
“The waiting time right now is ranging from one year to two years. If you have to wait that long before you can even be given a go signal then it can be a detriment to those who would like to be able to offer their capacities on renewable energy,” he said.
The GEA program aims to promote renewable energy as a primary source of energy through competitive selection.
This program is expected to help the government increase the share of renewables in the energy mix to 35% by 2030 and 50% by 2040.
The government is also examining the adoption of nuclear power to stabilize the energy supply.
Mr. Lotilla said the Energy department is working with other government agencies such as the Department of Science and Technology and the National Economic and Development Authority to include the private sector in nuclear power development.
“The government is prohibited from entering the power generation space but if there is a possibility for the private sector to do it, we should support it,” he added.
“I do not want to second guess Congress… It is for Congress to decide whether or not we should go for nuclear power. Even the timing will be determined by them. But we intend to work with them so in the meantime, we can be sure that when that decision is made… we won’t be starting from scratch,” he said.
Mr. Lotilla said nuclear can be added to the energy mix “within the decade.”
Meanwhile, Mr. Lotilla said that the Malampaya Consortium is on track with its drilling program within the Service Contract (SC) 38 which covers the Malampaya gas field.
In May, President Ferdinand R. Marcos, Jr. signed an agreement renewing the service contract for the Malampaya field until 2039.
The Malampaya field, which is experiencing dwindling supply, is the Philippines’ only indigenous commercial source of natural gas.
“The good news that was shared with the President (on Tuesday) by the Malampaya consortium is that we are on track to having the first drilling for the nearby fields by the end of 2024 and we are looking forward to new or additional supply from the same service contract by 2026,” Mr. Lotilla said.
The Malampaya Consortium’s members are Prime Energy Resources Development B.V., UC38 LLC; and PNOC Exploration Corp.
“The conduct of exploratory drilling further away from the Malampaya production area within the Service Contract is a requirement for the SC 38 consortium to retain the exploration areas,” he added.
The Malampaya Consortium has said that it expects to spend around $600 million on new drilling within SC 38. — Ashley Erika O. Jose