THE Energy Regulatory Commission (ERC) and Department of Energy (DoE) said they are considering doing away with reserve prices for the third round of the Green Energy Auction (GEA), and could rely solely on an evaluation of bid submissions instead.
“The ones for this year are for geothermal and pumped storage hydro. We’re still in discussions with the DoE because it’s a different technology; the costs are front-ended,” ERC Chairman and Chief Executive Officer Monalisa C. Dimalanta told reporters on the sidelines of a wind energy forum on Tuesday.
“We’re studying if it’s possible not to put a reserve price… and we’ll just evaluate after the bids are submitted,” she added.
In May, the DoE said that it could offer 9,000 megawatts (MW) worth of geothermal and hydroelectric projects for GEA-3. The auction is scheduled for the fourth quarter of 2023.
In GEA-2, the government auctioned capacity of 11,600 MW. The DoE said in July that the auction resulted in bids for 3,580.76 MW worth of renewable energy capacity, but the result was later downgraded to 3,440 MW after some participants failed to comply with bid requirements.
The GEA program aims to promote renewables as a primary source of energy through competitive selection of renewable energy output.
“If I were an investor I’d want a reserve, so I don’t have regulatory risk after. But if the reserve is too low… then maybe they’d rather have that risk. They’d rather bet on post-bid regulatory approval than the pre-approved low price,” she said.
Asked for details on the no-reserve scenario, she said: “Kung hindi kami mag-set ng reserve price or cap… (If we do not set a reserve price or cap) we’ll have to evaluate on a per offer basis.
Ms. Dimalanta said regulators are still conducting focus group discussion with investors. They will also check with the banks to determine which options are “more palatable” from the project finance point of view. — Sheldeen Joy Talavera