REGULATORS are reviewing the structure of the government’s Green Energy Auction Program amid questions over pricing efficiency, market participation and transparency in the procurement of renewable energy (RE).
The 10-year program aims to secure at least 25 gigawatts of RE capacity with a 35-percent share in the country’s power mix by 2030 and 50 percent by 2040.
At a recent policy dialogue, officials of the Philippine Competition Commission (PCC) and the Energy Regulatory Commission (ERC) discussed the method of determining green energy auction reserve prices, which serve as the ceiling for winning bids.
The ERC said it uses a discounted cash flow model “designed to be transparent and reflect maturing technology costs to prevent over-recovery and protect consumers from inefficiencies,” ERC Chairman Francis Saturnino Juan said.
The success of an auction is measured not only by price outcomes, but also whether awarded projects eventually supply electricity at reasonable rates, Juan said.
The meeting also examined the current per-grid auction design, in which biddings are segmented by geographic area. This is to support grid stability and avoid concentrated power generation that could strain transmission infrastructure and raise system costs.
Likewise discussed was transparency in the bidding process, whether price caps should be publicly disclosed, and how pre-bid consultations are conducted.
The PCC earlier explored the option of limiting disclosure of price caps to reduce collusion risks, but the ERC stressed that public participation requirements in rate-setting processes must still be observed under existing legal and administrative rules.
The assessments are intended to help government agencies evaluate whether policies are aligned with principles under the National Competition Policy, which promotes a whole-of-government approach to market efficiency and regulatory reform, the PCC said.
