The Energy Regulatory Commission (ERC) will determine the new price cap for the unsubscribed power generation capacity in the course of the last round of the green energy auction program (GEA-2).
In a report by the Inquirer, ERC Chairperson Monalisa Dimalanta said that before determining the new Green Energy Auction Reserve (GEAR) price, several variables are taken into account, including the risk-free rate and the interest rate at the time of investment.
Dimalanta adds that if the Department of Energy (DOE) decides to carry on with the re-bidding, ERC would reconsider these factors. Even though ERC is the one setting the GEAR price for different kinds of technology, they nevertheless take into account the price caps based on capacity.
Other renewable energy sources, such as geothermal and impoundment hydropower, will also have new rates established by the ERC because they both require substantial front-end expenditures or fees that must be paid before such projects are permitted to be launched.
Dimalanta explained that in the geothermal sector, a significant investment is required for exploration, drilling wells, and assessing viable steam volumes. On the other hand, in impoundment hydro, the major investment lies in constructing dam facilities.
However, the DOE’s contractual capacity is just 29.7% of the total 11,600 MW.
The projects are scheduled to commence from 2024 to 2026, offering competitive rates that are equal to or lower than the price ceilings established by the ERC.
The ERC determined the GEAR price for rooftop solar at Php 4.8783 per kilowatt-hour (kWh), floating solar at Php 5. 3948 per kWh, ground-mounted solar at Php 4.4043 per kWh, onshore wind at Php 5.8481 per kWh, biomass at Php 5.4024 per kW,h and biomass waste-to-energy at Php 6.2682 per kWh.
