The Energy Regulatory Commission (ERC) has announced the Green Energy Auction Reserve (GEAR) prices under the first round of the Green Energy Auction Program (GEAP).
For solar, the price has been set at Php3.6779 per kilowatt-hour (kWh), wind at Php6.0584/kWh, biomass at Php 5.0797/kWh, and run-of-river hydro at Php 5.4913/kWh. These will serve as the ceiling price for the first round of auction that will be conducted by the Department of Energy (DOE).
“We have set the GEAR Prices for each type of technology consistent with the Notice of Auction of the DOE setting the auction capacities on a per technology basis, and using the Discounted Cash Flow Model with forty-six (46) parameters and assumptions for each technology,” outgoing ERC Chairperson Agnes Devanadera said in a statement.
The GEAR prices set by the commission are lower or within range of the recent power supply agreements of newly constructed plants and those that are ongoing construction, and will remain fixed during the whole life of the project.
“In the determination of a representative project and the computation of the GEAR Prices, the Commission was guided by the principle of efficiency and international benchmarks to ensure that only the cost of efficient plants will be passed on to consumers,” Devanadera said.
In other developments, the ERC is not inclined to lower the 500-kilowatt (KW) threshold for the Retail Competition and Open Access (RCOA) program.
Devanadera said in a Manila Bulletin report that under the 500kW threshold, the uptake had not been aggressive, as the choice “will depend on consumers.” She added that the availments under the current threshold are low “because we still have not tried it that long,” and that they would need to study whether consumers are ready for RCOA before lowering the threshold.
According to the ERC’s timeline set in 2020, the RCOA threshold should have been lowered to between 100kW and 499kW this year, and further lowered from between 10kW and 99kW by 2023.