Philippines DOE Announces New Renewable Energy Capacity Auctions
In a major announcement at the APAC Wind Energy Summit in Melbourne, Australia, the Philippines’ Department of Energy (DOE) is set to open new avenues for local and foreign investors. Following the completion of its fifth Green Energy Auction (GEA) for 3.3 gigawatts (GW) of offshore wind, the DOE plans to hold at least four additional auctions to enhance renewable energy (RE) capacity.
Future Auctions to Attract Global Investors
Energy Undersecretary Rowena Cristina Guevara detailed plans to reveal upcoming bidding timelines and capacities for project sponsors during a high-level panel discussion. “By the end of this year, we plan to announce auctions number six, seven, eight, nine and so on – so that people will know; and the developers and bankers especially will know when the projects are going to come online; and when the projects need the funding,” Guevara stated, underlining the DOE’s commitment to transparency.
Focus on Waste-to-Energy Projects
GEA-6 will primarily focus on waste-to-energy initiatives, while the DOE continues to refine the timing and technology for subsequent auctions. Guevara emphasized the need for synchronization in auction planning to ensure sufficient supply capacity and prevent overlap or delays in project implementation.
A Year of Renewable Energy Auctions
2023 marks an ambitious year for renewable energy auctions in the Philippines. The DOE aims to award up to 20GW of renewable energy capacity through various auctions. This includes 6.6GW from earlier GEA-3 awards focused on pumped storage hydro and geothermal projects, and 9.4GW from recent GEA-4 winning bids.
“This is the year of auctions in the Philippines. We have already finished the first one for pumped storage hydro and geothermal, awarded 6.6GW; and recently concluded onshore wind and solar projects—rooftop, ground-mounted, and floating solar—with a projected award of around 9.4GW. Finally, we are gearing up for 3.3GW of offshore wind,” Guevara elaborated.
Facilitating Offshore Wind Projects
The DOE is working closely with offshore wind developers to streamline permitting processes for 16 leading projects. Guevara highlighted that the successful launch of the first offshore wind project could potentially inspire further investments in the sector, paving the way for a more robust renewable energy landscape.
Addressing Financial Concerns
Although financing can be a complex issue for offshore wind projects, Guevara reassured developers of the financial models available. Besides the 20-year power supply agreements (PSAs) secured through GEAs, renewable energy developers also have the option to transition to retail electricity supply or engage in the merchant market post-contract.
Challenges Ahead for Renewable Energy Growth
Guevara acknowledged that the journey towards realizing ambitious offshore wind goals will not be without challenges. The Philippines faces several hurdles, including grid integration, port infrastructure shortcomings, and the supply chain for critical minerals necessary for project sustainability. “The road is not easy—everybody has the same problems: transmission, permitting, and of course, bankability. Building an offshore wind farm is quite complex, and we’re learning from our developers all the problems that they are encountering,” she noted.
Potential in Critical Minerals
With the Philippines possessing reserves of copper, nickel, and rare earth elements, there is potential for local support in the renewable energy transition. Guevara suggested that increased regional coordination in the Asia-Pacific could help improve the management of supply chains for critical minerals essential for renewable energy technologies.
Conclusion
As the Philippines gears up for a significant increase in renewable energy capacity through the upcoming auctions, the commitment to facilitating a sustainable energy transition is clear. With logistical and financial challenges ahead, the DOE aims to create an inviting atmosphere for both local and international investors, reaffirming the Philippines’ position in the global renewable energy landscape.
