OFFSHORE wind projects in the fifth round of the government‘s Green Energy Auction program have been granted a Green Energy Auction Reserve (GEAR) ceiling price of P11 per kilowatt-hour (kWh), the Energy Regulatory Commission (ERC) said over the weekend.
GEAR is the maximum price that the ERC has set for renewable energy (RE) auctions. It serves as the upper limit for bid offers, ensuring competitive pricing and protecting consumers from high electricity costs.
The P11/kWh was higher than the preliminary rate of P10.3859 issued in December due to updated capacity factor, inclusion of port rental, fishery compensation, land acquisition or rental costs, inflation, and foreign exchange assumptions, the ERC explained.
Certain components were also reduced or removed, including the cost of equity and decommissioning costs.
Meanwhile, there will be additional consultations to finalize how tariffs may be adjusted to reflect possible changes in project costs and foreign exchange rates between project award and commercial operation, the ERC said.
A third round of public consultations on the implementation of a one-time indexation mechanism for tariffs is scheduled on March 9 at the ERC office in Pasig, and March 10 online for Visayas and Mindanao stakeholders.
The proposed formula adopts a cost-component-based adjustment in which foreign exchange indexation applies only to specific foreign-denominated loans.
After setting the GEAR price, stakeholder feedback will help ensure that the indexation framework will reflect project cost realities while maintaining consumer protection, the ERC said.
