DOE ends 2026 coal bid, reassesses Semirara terms

The Department of Energy has terminated the 2026 Coal Bid Round covering three predetermined areas as it moves to rewrite bidding parameters to secure clearer and more measurable benefits for the government and Filipino consumers.

The decision could reshape how the country awards commercially viable coal resources by putting greater weight on government revenues, domestic coal supply, and other enforceable economic benefits. For consumers, the key issue is whether new contract terms can translate the value of State-owned resources into stronger energy security and potentially lower electricity costs without creating prolonged uncertainty over future coal production.

Launched in February, the bid round offered 18 coal blocks across Semirara Island in Antique, Cagayan, and Isabela. The original DOE offering consisted of 10 blocks in Semirara, three in Cagayan, and five in Isabela.

The Semirara offering includes 10 blocks within the area covered by Semirara Mining and Power Corp.’s Coal Operating Contract No. 5, or COC5.

SMPC’s existing contract is scheduled to expire on July 14, 2027.

The DOE said available data indicate that the areas contain confirmed mineable coal reserves of commercial quantity, making them immediately suitable for development and production.

Because the resources carry lower geological uncertainty than unexplored areas, the department said future contract terms should reflect their established economic value and potential returns to the State.

“The DOE maintains that the development and production of these resources must serve the national interest,” the agency said in a statement on Sept. 19.

The revised bidding framework will give greater weight to measurable and enforceable economic benefits, including appropriate government revenues, commitments to domestic coal utilization, and other benefits proportionate to the value and characteristics of the resources.

The DOE said commitments to use more coal domestically could help reduce electricity costs while supporting the country’s energy requirements and strengthening energy security.

The domestic-use question has become increasingly important because Energy Secretary Sharon Garin said in August that the government was considering requiring a larger portion of Semirara coal production to be sold locally under the next contract.

Garin also said the DOE was studying a higher government revenue share and that the original bidding timetable could be delayed by at least two months while officials worked on revised terms of reference.

The termination follows months of uncertainty surrounding the auction.

In July, SMPC sought court protection against DOE demands for proprietary geological, technical, and equipment information connected to the bidding process.

The DOE said its reassessment would also take into account issues raised during pre-submission conferences and recent developments affecting Semirara Island.

Ongoing water seepage could affect the volume of coal that can ultimately be extracted, creating another variable in determining the commercial value of the resources.

The legal dispute between SMPC and the DOE over coal operation assets also creates uncertainty for prospective bidders as they develop operational plans and bidding strategies.

The department cited Article XII, Section 2 of the 1987 Constitution, which provides that natural resources are owned by the State and that their exploration, development, and utilization are subject to State control and supervision.

The DOE said the government may reassess or terminate a competitive bidding process when existing parameters are no longer sufficient to protect State assets and advance the national interest.

The agency will now recalibrate the bidding parameters before the coal areas are offered again.

The DOE is also coordinating with the Department of Environment and Natural Resources on a broader policy framework for awarding service and operating contracts involving natural resources.

The framework is intended to ensure that future contracts provide appropriate economic returns and enforceable benefits to the State.

The DOE said terminating the current bid round does not signal a retreat from developing indigenous energy resources.

Instead, the agency said the move gives the government an opportunity to establish stronger conditions before the areas are offered again, with the objective of securing long-term energy benefits and greater value for Filipino consumers.