Local renewable energy (RE) stakeholders strongly support the Department of Energy (DOE) initiative terminating renewable energy contracts that fail to meet development timelines. The DOE has identified 105 such projects, mostly awarded in 2017 and 2019, that are at risk of termination due to non-compliance.
Theresa Cruz-Capellan, Sun Asia Energy CEO, believes their termination will benefit legitimate developers by freeing up limited grid access. “I agree for the DOE to review and clean out non-performing contracts,” Cruz-Capellan stated. However, she emphasized the need for clear accountability, urging the government to establish performance review parameters that consider delays caused by bureaucratic obstacles.
Jose Layug Jr., president of Developers of Renewable Energy for AdvanceMent Inc., said that while the private sector appreciates the DOE’s action, clear criteria for terminations are essential. He suggested that the DOE focus on contracts lacking pre-development activities or permits. Layug also called for the consideration of transmission capacity issues and acts of force majeure when evaluating contracts.
Emmanuel Rubio, president of Meralco PowerGen Corp., welcomed the DOE’s decision but highlighted the importance of addressing the potential “void” left by these contract terminations. “The next move for DOE is to revisit how they’re going to fill this up,” Rubio remarked. He also suggested that the DOE review its pricing for RE incentives to attract further investment.
DOE data show many of the contracts facing termination have been delayed due to failure in securing possessory rights or completing system impact studies.
As of the end of 2023, renewable energy constituted 29.7 percent of the country’s power supply mix, with a total installed capacity of 8,416 megawatts from hydro, geothermal, wind, biomass, and solar technologies. Stakeholders are now calling for reforms to ensure that the DOE’s actions lead to a more efficient and accountable renewable energy sector.
