Renewable energy (RE) certificates to be sold through the RE Market (REM) trading layer of the country’s Wholesale Electricity Spot Market will have standardized price caps, which will be developed by the Philippine Electricity Market Corporation (PEMC).
Under a draft Circular of the Department of Energy (DOE), the Energy Regulatory Commission (ERC) is responsible for the approval of the set certificate price cap, as reported in a Manila Bulletin article.
There had been no formula laid down yet on how PEMC will compute for the price cap. It also has not been specified yet the process for trading the RE certificates via the WESM.
The DOE has explained that the creation of the RE market aims “to facilitate the compliance of the mandated RE participants with the RPS (Renewable Portfolio Standards).”
The RPS is a policy which mandates distribution utilities to secure a certain percentage of their energy portfolio from RE sources.
Rules and policies surrounding the trading of RE certificates are not yet clear.
In other power markets, RE certificates are “market-based instrument that certifies the bearer of the certificate as the owner of the megawatt-hour of electricity generated from RE resource and is to be traded in the RE market.”
RE certificates have different terms in different electricity markets such as Renewable energy credits, green tag, renewable electricity certificates or tradable renewable certificates.
The RE market is one of DOE’s efforts to incentivize further flow of investments in the country’s RE industry.