GEA-3 still in limbo

MANILA, Philippines —  The Energy Regulatory Commission (ERC) has moved back the issuance of the ceiling price for run-of-river (ROR) hydro, which will be included in the third round of the green energy auction program (GEAP).

Citing pending issues, the ERC deferred ROR hydro’s preliminary GEA reserve price, or the maximum price offer that is used as the ceiling price in the auction.

ERC chairperson and CEO Monalisa Dimalanta said the release of the pricing guideline has been postponed as the commission is currently addressing a policy matter with the Department of Energy (DOE).

Dimalanta was referring to the “parallel implementation of FIT (feed-in tariff) and GEAP for ROR hydro.”

For GEA-3, the government is set to offer impounding hydro, pumped storage hydro, ROR hydro and geothermal contracts with a combined capacity of 4,475 megawatts.

Among these facilities, ROR hydro is the only technology eligible for FIT, a policy that offers guaranteed fixed payments for emerging renewable energy (RE) sources.

“There is still unsubscribed capacity for FIT for this technology (ROR hydro), yet there is additional capacity allocated for GEAP. This may confuse stakeholders and may render one policy in conflict with the other,” Dimalanta explained.

“We are asking for DOE’s on the way forward considering we are also reviewing the FIT rate for ROR hydro,” she said.

Dimalanta said the ERC wants to resolve this matter during its first commission meeting next year.

The commission, meanwhile, has resolved to adopt the revised draft price determination methodology (PDM) for non-FIT-eligible RE technologies included in GEA-3.

However, further details about the revised pricing mechanisms have yet to be disclosed.

The regulator earlier solicited comments from industry stakeholders regarding the draft PDM for geothermal, impounding hydro and pumped storage hydro.

Under the proposed PDM, non-FIT-eligible facilities will undergo a two-point evaluation to assess the “reasonableness and prudency of the price offer.”

The project development cost, net capacity factor and weighted average cost of capital components of each bid would be evaluated first to determine if they meet the minimum score requirements.

A weighted scoring system will likewise be used in the second part of the evaluation, with each parameter assigned a predetermined weight depending on its impact on the tariff.

These pricing guidelines are crucial for GEA-3 to finally move forward next month after being delayed from the original target completion date this year.

GEAP is designed to trigger the expansion of the country’s RE capacity to support the government’s target of expanding the share of renewables in the energy mix to 35 percent by 2030 and 50 percent by 2040.