The Department of Energy (DOE) said the trading of renewable energy certificates (RECs) will start on Dec. 26, 2024, marking the full commercial operation of the Renewable Energy Market (REM).
“The full commercial operation of the REM is pivotal in advancing the country’s clean energy transition,” said Energy Secretary Raphael Lotilla in a statement.
RE certificates are market-based instruments representing one megawatt-hour (MWh) of electricity generated from eligible renewable energy facilities, such as solar, wind, hydro, geothermal, and biomass.
The REM provides a platform for trading these certificates, enabling participants to meet their renewable energy compliance obligations under the renewable portfolio standards (RPS).
It is a cornerstone mechanism under the Renewable Energy Act of 2008, designed to drive the development of renewable power projects and bolster the country’s transition to clean energy.
“It supports compliance with the RPS, fosters investment in renewable energy, and ensures a robust framework for sustainable energy trading,” Lotilla said.
The RPS is a market-based policy requiring mandated participants, such as distribution utilities (DUs), to source a portion of their energy supply from eligible renewable energy facilities.
The annual incremental RPS requirement for grid-connected areas was raised from 1 percent to 2.5 percent in 2023.
Renewable energy was projected to supply 11.4 percent of the total power demand in 2024, underscoring the critical role of the REM in achieving compliance.
Around 285 participants, including generators, distribution utilities and end-users are anticipated to register with the REM.
The DOE projects that REC trading would significantly contribute to meeting RPS requirements and stimulate growth in renewable energy capacity.
Lotilla said the trading and usage of RECs would become more frequent as renewable energy demand continues to grow.
The DOE said the launch of REC trading represents a major step forward in the Philippines’ commitment to energy security, economic growth, and environmental sustainability.
It aims to help the Philippines achieve its target of at least 35 percent in the power generation mix by 2030 and 50 percent by 2040.
