RE players seek improvements in green energy auction

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By Sheldeen Joy Talavera, Reporter

RENEWABLE ENERGY (RE) leaders are seeking improvements in the green energy auction program (GEAP) to allow more energy players to participate actively.

At an energy forum organized by ING Philippines on Monday, SunAsia Energy, Inc. President and Chief Executive Officer Maria Theresa Cruz-Capellan said that the government should craft “a more sophisticated auction design.”

“Gas and pump storage and even geothermal needs a special kind of auction design because it is not the same as solar and wind…That kind of a market mechanism has to be more specific function design. I think we’re getting there,” Ms. Capellan said.

She said that the GEA was designed to support and fit new green technologies.

“There has to be a more sophisticated auction design that will allow leaders in the energy sector to participate actively and see the signals as correct,” Ms. Capellan said.

The GEAP aims to promote renewable energy as one of the country’s primary sources of energy through competitive selection.

The Department of Energy (DoE) is set to stage two rounds of GEAP this year.

GEA-3 involves geothermal, pump-storage hydro, run-of-river hydro, and impounding hydro with a total capacity of 4,399 megawatts (MW).

Meanwhile, the DoE is also targeting to hold GEA-4 which involves renewable energy technologies and energy storage systems and liquefied natural gas technologies.

Ms. Capellan noted the “red flags” during the second round of GEA, which resulted in few takers and subscribed capacities.

To recall, the DoE blamed the low turnout of GEA-2 on concerns about transmission lines available for the projects and the low reserve prices on offer.

First Gen Corp. Vice-President and Head of Power Marketing, Trading & Economics Carlos Lorenzo L. Vega said that there was “a huge gap” during the previous round as the capacity offered was at more than 11,000 MW, but only over 3,000 MW were subscribed.

“Clearly, we welcome more off-take mechanisms. This will help the strategy in managing risks. Having said that, it is not without difficulty because you know, while it’s good to have more off-take mechanisms, the devil is really in the details,” Mr. Vega said.

While the company looks forward to geothermal being part of the next round of GEA, Mr. Vega said that the policy makers should put up proper “price signal.”

“We hope before we get to the tenth round, the DoE has already kind of sorted it out,” Ms. Capellan said.

GEA was first conducted in 2022 and attracted 1,996.3 MW worth of renewables, while GEA-2 was held in 2023, where 3,440.756 MW were awarded.

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