Out-Law / Your Daily Need-To-Know

Philippines launches tender for 2GW of renewables

Out-Law News | 01 Mar 2022 | 2:09 am | 1 min. read

The energy department of the Philippines’ government has begun an auction to award two gigawatts (GW) of renewable energy capacity via its green energy auction programme.

According to the auction notice, the country plans to award 130 megawatts (MW) of hydro power, 1.26GW of solar power, 380MW of wind power and 230MW of biomass power.

Facilities are planned to be installed in three locations: Luzon, Visayas and Mindanao. According to the plans, 900MW solar projects will be constructed in Luzon, 260MW will be in Visayas and the remainder in Mindanao. Hydro power will be installed in Luzon and Mindanao, of 80MW and 50MW respectively. The majority of the planned wind power, 360MW, will be installed in Luzon with the remaining 20MW to be installed in Visayas.

Qualified suppliers who want to participate in the auction will need to register with the energy department by submitting a letter of intent to the green energy auction committee, signed by the qualified supplier’s authorised representative. They must also supply proof of authority of the qualified supplier’s authorised representative to sign documents related to the auction, a work programme and proof of payment of registration and processing fee.

William Stroll

William Stroll

Partner

This auction process introduces a welcome change to the development of renewable energy power in the Philippines.

The Philippines established its green energy auction as a mechanism to speed up the selection of eligible renewable plants via a competitive process or auction.

William Stroll, Partner at Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “This auction process introduces a welcome change to the development of renewable energy power in the Philippines. Historic renewable energy projects have typically been secured by the old feed in tariff regime which has been discontinued for a while.”

“Whilst the tender for 2GW of renewables is significant, it is also important to note that the Philippines’ utilities have launched separate renewable energy tenders to meet their requirements to source renewable energy under the RE Act. This requirement is currently set at 1% but will increase, and this 2GW renewable energy auction should be considered in total with other recent auctions,” he said.

“For example, Meralco recently launched an 850MW renewable tender for projects commencing operations from 2026.  The benchmark price for bids in the Meralco tender is a levelized cost of energy of PHP6.08/kWh (US$0.12),” Stroll said.

According to the International Renewable Energy Agency (IRENA), the Philippines had 6.84GW of renewable energy capacity in 2020, which accounted for 27% of its total power generation capacity. The capacity of hydropower was 3.03GW, solar accounted for 1.05GW capacity, and wind for 443MW capacity. The country had 1.93GW of geothermal capacity as of 2020.