Renewable energy developers called for an established set of parameters from the Department of Energy (DOE) when weeding out non-performing service contracts.
Developers of Renewable Energy for AdvanceMent (DREAM) president Jay Layug and Philippine Solar and Storage Energy Alliance (PSSEA) chair Tetchi Capellan welcomed the DOE’s move, but asked the agency to consider the delays brought about by non-action of government agency.
The DOE said it planned to terminate at least 105 RE projects over non-compliance with project timelines.
“I agree for the DOE to review and clean out non performing contracts. This will free up grid access and allow serious developers with to implement the projects. But, there has to be some parameters on the performance review particularly the delays or lack of action on the part of government agencies that prevent contracts from progressing. Accountability has to be clearly established,” Capellan said.
Layug said the private sector appreciates the efforts of the DOE to streamline service contract applications and monitor non-performing RE developers who were given periods to develop their projects.
“As the government actively pushes for RE, we hope however that the DOE considers the following: one, terminate only those contracts that are indeed non-performing in terms of pre-development and securing permits [those which have no activity whatsoever]; two, consider lack of or insufficient transmission capacity on the targeted commercial operations date as acts of force majeure and accordingly adjust the RE contract term,” he said.
Layug said the DOE should also treat service contracts primarily as platform to study the feasibility/availability of the particular RE resource and therefore assist the private investors in their efforts to build the RE plant.
“The industry players are ready to invest funds in the RE sector,” he said.
Meralco PowerGen Corp., the generation unit of Manila Electric Co. (Meralco), earlier said the DOE’s move to terminate the projects “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 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.
