The Department of Energy (DOE) says that 21 of the 42 renewable energy (RE) service contracts awarded to Solar Philippines are set to be terminated.
In a report by Inquirer, Energy Undersecretary Rowena Cristina Guevara revealed this during a Senate hearing on the DOE budget after Senate President Pro Tempore Jinggoy Estrada raised concerns about Solar Philippines’ failure to meet its obligations under the service contracts granted by the DOE.
Guevara stated that 21 contracts are currently in the process of termination because Solar Philippines was unable to meet the scheduled targets outlined in its program.
Estrada noted that a total of 473 service contracts had been awarded to various RE companies by last March, with a commitment to generating 32,359 megawatts (MW) of solar energy.
He further highlighted that while Solar Philippines and its affiliates committed to producing 10,000 MW, only 174.41 MW, or two percent, have been completed and are in commercial operation.
Estrada questioned how this failure to deliver would affect the DOE’s renewable energy targets, citing specific projects such as the Iba-Palawig, Iba-Palawig 2, and San Marcelino Phase 3.
Guevara pointed out that the most difficult aspect of these solar projects is land acquisition, which has caused significant delays, not only for Solar Philippines but for other RE developers as well.
She explained that previous guidelines did not require possessory rights for service contracts, but under new regulations, developers must now have these rights before being awarded contracts.
Estrada expressed frustration with Solar Philippines, noting that while most developers take two to three years to begin project development, Solar Philippines has taken over three years without significant progress.
Guevara added that, of the 32,359 MW covered by service contracts, other developers have developed or are developing 22,000 MW, leaving 10,000 MW tied to Solar Philippines’ projects.
Estrada warned that this could jeopardize the DOE’s ability to meet its renewable energy commitments and urged the department to take the matter seriously.
Senators Pia Cayetano and Sherwin Gatchalian expressed the same concerns, pressing the DOE for answers on the delays in fulfilling the service contract commitments.
In response, Guevara said that the DOE plans to issue new terms of reference for future green energy auctions, which will include the performance of RE developers as a key criterion.
