The Philippine Solar and Storage Energy Alliance asked the Energy Regulatory Commission to review the auction rates amid the low investor turnout during the Green Energy Auction Program 2.
“We urge ERC to seriously examine the tariff rates in the GEAP. The rates are not reflecting the realities of the current demand and supply of electricity in the country, nor is it encouraging developers to build,” PSSEA chairperson Tetchi Capellan said.
The Department of Energy’s GEAP 2 generated 3,580.76 megawatts of renewable energy capacities who committed to deliver energy from 2024 to 2026 at a price that is lower than or equal to the prices set by the regulator.
The committed capacities is way below the 11,600 MW offered by DOE for private sector development on Monday.
Energy players committed to develop 1,968.982 MW of ground-mounted solar from 2024 to 2026.
Meanwhile, 9.39 MW was committed for 2024 and 2025 for rooftop solar, and 90 MW for the construction of floating solar in 2026.
Developers committed 1,512.384 MW for onshore wind from 2025 and 2026.
“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,” Capellan said.
The PSSEA sought for a higher reserve price for floating solar of P7.3661 per kilowatt-hour compared to the ERC-approved P5.3948 per kWh.
Capellan said the renewable energy developers epeatedly made representations to the ERC on the parameters of the tariff structure.
“In the case of solar, PSSEA submitted studies and actual references that can form part in designing green tariff. Unfortunately, these parameters failed to convince ERC,” she said.
“We believe that for the industry to deliver the ambitious target of the President, there has to be an honest-to-goodness realization of the current market prices. Without this, future GEAP will fail to entice developers,” Capellan said.
She said the ERC should consider that floating solar is different from ground-mounted solar, especially on the cost.
Capellan said first-mover developers were taking the risk just like in the previous feed-in tariff regime, but once the technology matures, the rates will eventually drop.