THE Senate has asked the Energy Regulatory Commission (ERC) to finalize green energy auction reserve (GEAR) prices for the auction of renewable energy to proceed this year.
“That is one of the priorities I think we need to do because in everything, the goal is to make the shift to renewables, and this is directly related to that. I hope we can get that done. I understand there are things that have to be done on the side of ERC as well,” Sen. Pia Cayetano said at the Senate hearing on the Department of Energy’s budget.
Energy Secretary Raphael Lotilla and ERC Officer in Charge and Chief Executive Officer Jesse Hermogenes Andres were present at the hearing.
The DoE assured Cayetano that the third Green Energy Auction (GEA-3) would be completed this year.
“Our target for the Green Energy Auction 3 is to finish it before the end of the year such that the pumped storage hydro, [more than] 3,000 megawatts (MW), will be able to come in five years from now,” Energy Undersecretary Rowena Guevara told senators.
But for the GEA3 to happen, the ERC must release the GEAR prices. It is the mandate of the ERC to determine GEAR prices or the maximum price offers for the GEA.
“One of the items required there would be the approved pricing methodologies with ERC. We’re coordinating that,” Lotilla said.
Cayetano said many investors were waiting for the third leg of the GEA, which facilitates investments in the renewable energy space. In the last two years, the DoE has conducted two rounds of auction, which generated 5,306 megawatts (MW) of RE commitments for delivery from 2024 to 2026.
However, the DoE received a commitment for only 3,580.76 MW out of the 11,600 MW offered under the GEAR2. The department cited supply limitations, low incentives, delays in the conduct of grid impact studies, and the cost of financial guarantees as reasons for low investor turnout.
GEA-3 covers non-feed-in-tariff (Non-FIT) eligible renewable energy technologies like geothermal, impounding hydro and pumped-storage hydro under DoE Circular DC2023-10-0029.
The estimated capacities for non-FIT eligible RE technologies are 699 MW from impounding hydro, 3,120 MW from pumped storage hydro and 380 MW from geothermal.
GEA-3 will also cover run-of-river hydro, which is a FIT-eligible RE technology.
