DOE Postpones Third Green Energy Auction to 2025

The Department of Energy (DOE) has rescheduled the third round of the Green Energy Auction (GEA-3) to January 2025, citing the need for a finalized pricing mechanism to guide the bidding process.

“So, the Green Energy Auction Program, we have GEA-3… It’s January of next year,” Energy Undersecretary Felix William B. Fuentebella said at the Energy Investment Forum 2024.

The DOE initially planned to hold the auction before the end of 2024 but opted to delay it to ensure clarity in pricing parameters for various renewable energy technologies.

Renewable Energy Goals in Focus

The GEA program aims to accelerate the use of renewable energy by inviting developers to compete for fixed power rates through a bidding process. GEA-3 will offer 4,475 megawatts (MW) of renewable energy capacity, including feed-in-tariff (FIT) and non-FIT-eligible technologies.

Of the total capacity, 4,000 MW will be allocated to pumped storage hydropower for delivery between 2028 and 2032. Another 300 MW of impounding hydropower will be slated for 2028 to 2030, while 100 MW of geothermal energy will be available for 2025 to 2027 delivery.

Additionally, 75 MW of FIT-eligible run-of-river hydropower is set for delivery between 2027 and 2029.

“These projects will play a crucial role in meeting the country’s growing electricity demand while ensuring that future power generation is increasingly sustainable,” the DOE said in a statement.

Pricing Mechanism Under Review

Energy Assistant Secretary Mylene C. Capongcol announced that the Energy Regulatory Commission (ERC) would finalize the pricing determination methodology (PDM) during the holiday season.

ERC Chairperson Monalisa C. Dimalanta stated that the commission is reviewing stakeholder feedback on the draft PDM, which covers the methodology and pricing formula for technologies like pumped storage hydropower.

“For pumped storage hydro, the asset will most likely provide ancillary services instead of supply or energy,” Dimalanta explained.

The PDM evaluates the “reasonableness and prudency” of price offers, ensuring that bids align with the DOE’s renewable energy goals.

Jose M. Layug Jr., president of the Developers of Renewable Energy for Advancement, Inc., emphasized the importance of the PDM.

“We fully understand the need for the issuance of PDM to allow GEA-3 bidders to review and study the feasibility of bids they will submit,” Layug said.

Renewable Energy Targets

The GEA program supports the Philippines’ goal of increasing renewable energy’s share in the power generation mix to 35 percent by 2030 and 50 percent by 2040.

Since its inception, the program has awarded 1,966.93 MW under GEA-1 in 2022 and 3,440.76 MW under GEA-2 in 2023.

Looking ahead, the DOE plans to conduct GEA-4 and GEA-5. GEA-4 will focus on integrated renewable energy and energy storage systems, while GEA-5 will prioritize offshore wind technologies.

Capongcol noted that the notice of auction and terms of reference for GEA-4 may be released by the end of December.

The DOE remains committed to advancing the renewable energy sector and ensuring a sustainable energy future for the Philippines.