Philippines Set to Launch More Renewable Energy Auctions
Melbourne, Australia—The Department of Energy (DOE) in the Philippines is on an ambitious path to enhance its renewable energy (RE) sector, aiming to attract both local and global investors through at least four more capacity auctions. Following the successful completion of the 5th Green Energy Auction (GEA) for 3.3 gigawatts of offshore wind energy, the DOE is preparing to unveil additional bidding opportunities, marking a significant step towards achieving its energy transition goals.
A New Wave of Energy Auctions
During a high-profile panel discussion at the APAC Wind Energy Summit, chaired by the Asian Development Bank (ADB), Energy Undersecretary Rowena Cristina Guevara outlined the DOE’s plan to announce new bidding timelines and capacities available for project sponsors. “By the end of this year, we plan to announce auctions number six, seven, eight, nine and so on—so that people will know when the projects are going to come online and when they need funding,” she stated.
Focus on Waste-to-Energy and Future Auctions
The upcoming auction, GEA-6, will specifically target waste-to-energy projects, demonstrating the DOE’s commitment to diversify its renewable energy sources. Guevara emphasized the importance of pacing these auctions to ensure a strategic and synchronized approach to energy supply, stating, “We need to guarantee synergy among us in terms of supply.”
This year alone, the DOE aims to award a staggering 20GW of renewable energy capacity, which includes 6.6GW awarded from GEA-3, 9.4GW from GEA-4, and the anticipated contributions from GEA-6. This ambitious goal speaks to the Philippines’ commitment to renewable energy as a foundational element of its energy strategy.
Offshore Wind: A Game Changer for the Philippines
The DOE’s push for offshore wind energy represents a transformative step forward in the country’s energy landscape. Guevara revealed that the government is prioritizing the facilitation of permitting processes for 16 front-runner offshore wind projects, aiming for the first kilowatt of energy production by 2028.
“If we can get the first offshore wind project operational, it will inspire other developers to come online,” she noted, emphasizing the project’s potential to catalyze further investment in the sector.
Overcoming Financing Challenges
While the Philippines is making strides in renewable energy, financing remains a major concern for offshore wind projects. Guevara addressed these financial challenges, highlighting the options available to RE developers. In addition to the 20-year power supply agreement (PSA) acquired through GEAs, developers can transition to retail electricity suppliers (RES) or access the merchant market after their contracts expire.
One notable case involved a company moving to RES after securing a bond, illustrating the flexibility available to project developers.
The Path to a Sustainable Energy Future
The future of offshore wind energy in the Philippines is bright, with targets set at 19GW for clean energy scenario-1 and an ambitious 50GW by mid-century for scenario-2. However, Guevara acknowledged the challenges that lie ahead, including grid integration, infrastructure development, and the availability of critical minerals needed for project sustainability.
“The road is not easy—everybody has the same problems, including transmission, permitting, and bankability,” she said, stressing the complexities involved in building offshore wind projects.
Coordination in the Asia-Pacific Region
Guevara also pointed out the need for regional coordination to better manage supply chains, particularly regarding critical minerals. While the Philippines has resources like copper and nickel, further exploration and collaboration in the Asia-Pacific region will be crucial for overcoming barriers in renewable energy implementation.
In conclusion, the Philippines’ proactive approach towards launching more renewable energy auctions creates unprecedented opportunities for investors and developers. With a clear strategy for scaling capacities and overcoming challenges, the country is well on its way to becoming a leader in the renewable energy sector in Asia.
