Meralco PowerGen Corp., the generation unit of Manila Electric Co. (Meralco), welcomed the decision of the Department of Energy terminating non-compliant service contracts, a top executive said Friday.
“I cannot comment on the reasons why those projects were terminated by DOE. There are a number of projects, and I’m sure there are a lot of reasons. But the DOE’s move to terminate this project is the right step moving forward because these projects are occupying a space in GEA [GreenEnergy Auction]-1 and GEA-2,” MGen president Emmanuel Rubio said.
He said these capacities were supposed to supply renewable energy to meet the renewable energy portfolio standards (RPS).
“So, if they don’t deliver on these projects, these are capacities that are needed by the grid. So, now that they have been terminated, I think the next move for DOE is to revisit how they’re going to fill this up…Because it is a void,” Rubio said.
He said the DOE should also review the pricing under GEA-1 and GEA-2 especially for solar projects.
“We started with low per kilowatt hour prices, particularly on solar. So, I think these are the things that the DOE needs to consider moving forward. But the cancellation I think is a right step moving forward,” Rubio said.
The DOE said it planned to terminate at least 105 RE projects over non-compliance with project timelines.
“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,” Energy Undersecretary Rowena Cristina Guevara said.
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.
It said these included 53 solar, 17 hydropower, 10 wind, 5 geothermal and three biomass projects.
Data showed that 1,435 service contracts with a total potential capacity of more than 156,700 MW were awarded to renewable energy developers as of June 2024, of which 6,100 MW were already installed.
The Philippines aims to increase the RE share in the generation mix to 35 percent by 2030 and 50 percent by 2040.
