The Department of Energy (DOE) said over the weekend it plans to cancel at least 105 renewable energy (RE) contracts over their failure to meet deadlines.
“The administration of President Ferdinand Marcos Jr. is committed to ensuring the efficient and timely execution of renewable energy projects by regularly assessing the progress of these projects and refining regulatory framework,” said DOE Undersecretary Rowena Cristina Guevara.
“If any contracts are deemed non-performing, we will open them up to new developers who can effectively bring these projects into fruition. This strategy not only accelerates the development timeline but also strengthens investor confidence in the country’s renewable energy goals,” Guevara said.
The DOE released the revised omnibus guidelines in June 2024, which governs the award and administration of renewable energy contracts and the registration of renewable energy developers.
The process helps identify and filter out non-serious developers, paving the way for legitimate developers committed to constructing RE projects efficiently.
The DOE said majority of these contracts were awarded in 2017 and 2019, and the common reasons for project delays included failure to secure possessory rights or system impact studies (SIS), indicating inability to connect to the grid.
It said of the total 105 projects, 88 were either delayed in their pre-development timeline or were not progressing at all.
Among the 88 projects, 53 are solar, 17 are hydropower, 10 are wind, five are geothermal and three are biomass, the agency said.
The DOE said that as part of its contract termination process for existing solar energy service contracts, developers have two years to complete the pre-development stage, which includes obtaining permits, conducting surveys, performing feasibility studies and securing possessory rights.
It said that if a developer failed to submit the declaration of completion (DOC) or demonstrate reasonable efforts within the timeframe, the DOE – Renewable Energy Management Bureau (REMB) would issue a show-cause order to request an explanation for the delay.
It said valid reasons for the delay such as force majeure might be allowed an extension, but if the reasons were insufficient or the developer did not respond, the REMB would recommend to the DOE Secretary the termination of the contract.
The developer would also be required to fulfill all financial obligations such as performance bond, payment of training commitment and development assistance, as provided under the service contract.
The agency said the revised omnibus guidelines introduced new opportunities for developers to improve their work program.
One significant change is the requirement to obtain a certificate of authority (COA) before signing a renewable energy contract. The COA is a critical step in the development process, as it empowers developers to secure the necessary permits and conduct essential surveys and pre-feasibility activities even prior to the commencement of the official 25-year contract.
The DOE said that by allowing these activities to take place earlier, developers could better prepare for project implementation and address potential challenges proactively.
The streamlined approach not only accelerates the project timeline but also enhances the overall efficiency of the development process.
The COA is valid for five years for offshore wind projects, three years for biomass, geothermal, hydropower, ocean and onshore wind projects, two years for floating solar and one year for land based solar projects.
The DOE said developers may secure a certificate of registration (COR) after confirming the commercial viability of their projects.
