The Department of Energy (DOE) assured that stalled power generation capacities will not be allowed to block the country’s clean energy transition, hence nonperforming projects are being cleared from the pipeline.
The agency said in a statement that these nonperforming capacities will be made available to other qualified developers through other mechanisms.
“The DOE is fully aware of concerns regarding certain Green Energy Auction Program (GEAP) projects that have not progressed in line with their committed delivery timelines. Consistent with the GEAP Terms of Reference and the revised omnibus renewable energy guidelines, the DOE is undertaking the appropriate actions, which may include the forfeiture of performance bonds and termination of contracts after due process, for any developer that fails to meet its obligations,” it said.
While the DOE said it cannot comment on the specifics of individual nonperforming cases at this time, it reiterated that all developers are treated equally under the rules, “and we remain ready to coordinate with the Philippine Competition Commission (PCC) or any competent authority on matters within their mandate.”
These stalled capacities allegedly include those from Solar Philippines Power Project Holdings Inc. (SPPPHI) and its subsidiaries for failing to develop around 1,350 megawatts (MW) of renewable energy capacity granted to them under the Department of Energy’s GEAP.
The DOE previously reiterated the agency’s commitment to weed out nonperforming service contracts and ensure that power plants are built on time.
“We are the policy makers that allow them and make sure that they invest, and of course, our responsibility is that they do perform their commitments. So that’s what we’re watching for,” Energy Secretary Sharon Garin said.
“Because there are consequences when you don’t deliver the project. Our energy planning will be damaged, that’s already included in our projections, and we should already know how many megawatts we have by next year, how many more, or how many less. So to make sure that we are on track, we police our stakeholders in that sense,” Garin said.
She said the DOE investigates the reasons for the project delays or discontinuance, and if those are not valid, the agency penalizes the developers.
“We inform them why they are not moving forward, and if they cannot give us a valid reason, then we cancel their contract. So it’s not a ghost project, because it does not involve the government money. Indirectly though, it affects the country,” Garin said.
Garin said the DOE wants credible and legitimate power developers because it’s a privilege to have a service contract for a utility.
“We have a very transparent process in DOE. In fact, a lot of people check that. I’m the executive now, but I’ve seen how many signatures it needs every time that we cancel. Because part of the process, before you can cancel, like any rights, it needs a due process. So we inform them first, and we give them a chance to explain,” Garin said.
