Renewable energy firm Sun Asia on Wednesday blamed the low 30 percent turnout of the second green energy auctions (GEA-2) to the unrealistic tariff schedule set by the Energy Regulatory Commission (ERC).
Maria Theresa “Tetchi” Cruz-Capellan, chief executive officer at Sun Asia Energy and a member of the Philippine Solar and Storage Energy Alliance (PSSEA), said the ERC offered the various proponents a price cap it considered “way below current market realities.”
Capelan urged the ERC to seriously examine the tariff rates in the program which she claims do not reflect the realities of the demand and supply of electricity in the country and certainly does not encourage developers to build renewable energy infrastructure.
“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” instead, Capellan told reporters in a text message.
Capellan said the various developers presented the ERC with studies and references hoping to convince the regulator to improve the tariff structure but failed.
“We believe that for the industry to deliver the ambitious target of the President, there has to be an honest-to-goodness realization of current market prices. Without this, future green energy auction programs will fail to entice developers,” Capellan said.
She reiterated the industry remains hopeful the regulator listens to the green energy proponents “and seriously consider what the market is telling them – that their price cap is way below the current market realities.”
Earlier in the week, the ERC sold only 30.9 percent or 3,580.76 megawatts (MW) of renewable energy of the 11,600 MW made available by the Department of Energy (DOE) under the second Green Energy Auction (GEA-2) program.
In GEA-2, renewable energy producers competed for incentivized fixed power rates by offering prices lower than or equal to the auction price set by the ERC.
Developers who lost or were unable to submit offers are encouraged to rejoin in subsequent auctions.
The ERC said it will review and advise auction participants on the unsubscribed portion of the program where 1,968.98 MW have been committed for the construction of ground-mounted solar for 2024 to 2026.
On rooftop solar, a total 9.39 MW were committed for 2024 and 2025, and 90 MW for floating solar in 2026.
On onshore wind, a total 1,512.384 MW have been committed for 2025 and 2026.
No commitments were received for the development of biomass and waste-to-energy projects under the second auction.
