Concerns over how renewable energy auctions are structured have prompted regulators to revisit the design of the Green Energy Auction Program (GEAP), as competition referees warn that certain features may unintentionally limit bidder participation and weaken price competition.

These issues were discussed during a January 19 policy dialogue between the Philippine Competition Commission (PCC) and the Department of Energy (DOE), following a competition impact assessment (CIA) by the PCC’s Economics Office on previous GEAP auction rounds.

The assessment pointed to several auction design choices that could dampen competition. These include the practice of segmenting auctions by island group, the use of representative plants in setting Green Energy Auction Reserve (GEAR) prices, and the public disclosure of price caps and pre-bid conferences. According to the PCC, these features may have reduced participation and created conditions where coordinated bidding is encouraged.

Instead of questioning the role of GEAP itself, the PCC said the findings highlight the need to reassess how auctions are structured to better align with competition principles. The CIA emphasized that auction rules should support the twin goals of delivering the lowest possible renewable energy prices while also accelerating the country’s shift toward cleaner power sources.

The DOE acknowledged the importance of the review, saying that GEAP auction rounds are regularly refined to improve participation and reflect changes in market conditions and technology. The agency noted that new competition safeguards have already been incorporated into more recent auction designs.

Despite concerns raised over geographic separation, the DOE said future auctions may still be conducted on a per-island-group basis, even with the national grid’s interconnectivity. The agency said this approach helps address localized supply needs and avoids potential service delivery risks in specific regions.

On pricing, the DOE clarified that GEAR prices are set by the Energy Regulatory Commission (ERC) through technical studies and consultations. They stress that transparency and adaptability remain key considerations as renewable technologies evolve.

For the PCC, the dialogue reflects its broader role in reviewing how government policies affect market behavior. Through CIAs, the Commission evaluates whether regulations promote or hinder competition and offers recommendations consistent with the National Competition Policy, which requires all agencies to embed competition principles into their policymaking.

As auctions become an increasingly central tool in rolling out renewable capacity, the review raises a broader question: how can GEAP’s design encourage more players to compete, without compromising reliability, affordability, or the country’s clean energy goals?

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