THE Energy Regulatory Commission (ERC) and Department of Energy (DoE) said they are considering doing away with reserve prices for the third round of the Green Energy Auction (GEA), and could rely solely on an evaluation of bid submissions instead.

“The ones for this year are for geothermal and pumped storage hydro. We’re still in discussions with the DoE because it’s a different technology; the costs are front-ended,” ERC Chairman and Chief Executive Officer Monalisa C. Dimalanta told reporters on the sidelines of a wind energy forum on Tuesday.

“We’re studying if it’s possible not to put a reserve price… and we’ll just evaluate after the bids are submitted,” she added.

In May, the DoE said that it could offer 9,000 megawatts (MW) worth of geothermal and hydroelectric projects for GEA-3. The auction is scheduled for the fourth quarter of 2023.

In GEA-2, the government auctioned capacity of 11,600 MW. The DoE said in July that the auction resulted in bids for 3,580.76 MW worth of renewable energy capacity, but the result was later downgraded to 3,440 MW after some participants failed to comply with bid requirements.

The GEA program aims to promote renewables as a primary source of energy through competitive selection of renewable energy output.

“If I were an investor I’d want a reserve, so I don’t have regulatory risk after. But if the reserve is too low… then maybe they’d rather have that risk. They’d rather bet on post-bid regulatory approval than the pre-approved low price,” she said.

Asked for details on the no-reserve scenario, she said: “Kung hindi kami mag-set ng reserve price or cap… (If we do not set a reserve price or cap) we’ll have to evaluate on a per offer basis.

Ms. Dimalanta said regulators are still conducting focus group discussion with investors. They will also check with the banks to determine which options are “more palatable” from the project finance point of view. — Sheldeen Joy Talavera

THE Asia-Pacific region continues to build coal-fired power plants even as countries embark on a transition to clean energy, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said.

In a report on Wednesday, ESCAP said that more than 180 gigawatts (GW) of capacity are under construction “despite the UN calling urgently for an end to coal-fired generation.”

ESCAP noted that Bangladesh, Cambodia, China, India, Indonesia, Japan, Pakistan, the Philippines, the South Korea, and Vietnam continue to build coal-fired plants.

“This presents a serious risk of overinvestment and the potential creation of future stranded assets in a carbon constrained world,” ESCAP said.

The report noted that the Asia-Pacific region “is by far the largest user of coal,” accounting for about 80% of the world’s consumption in 2021.

The Department of Energy (DoE) estimated that as of July, the Philippines has a total coal installed capacity of 12,472 megawatts (MW).

To date, the Philippines also has coal power projects with a total capacity of 2,405 MW classified as “committed” — indicating firm arrangements for their financing — and 1,520 MW in “indicative” status.

In 2020, the DoE issued a moratorium on greenfield coal-fired power plants to accelerate the shift to a more flexible power mix.

Asked to comment, Gerry C. Arances, executive director of Center for Energy, Ecology, and Development, said in an e-mail that “the government continues to ignore the urgency of a coal phase-out by promoting only voluntary rather than mandatory phaseout and repurposing of existing plants as its approach.”

“The climate-aligned solution of shifting renewable energy is clearly within arm’s reach for the Philippines, with at least 5-5 GW of renewables about to come in through the Green Energy Auction Program alongside other favorable developments,” Mr. Arances said.

“Amid all these, coal becomes and increasingly undesirable power source — and the ESCAP hits the mark in warning of coal assets greatly risking stranding at this point,” he added.

The DoE has said that the Philippines is on track to hit its target to increase the share of renewable energy (RE) in its power generation mix to 35% by 2030 and to 50% by 2040.

At the end of 2022, RE accounted for 22.1% of the energy mix while coal made up 59.6%.

ESCAP said that successful energy transition will depend on “finding ways to manage the phase-out of existing coal-fired power.”

“Transforming the energy system to meet sustainability goals involves reducing reliance on fossil fuels — notably coal — in addition to scaling up clean energy in an inclusive manner,” ESCAP said.

Renewable energy production is the seventh of the 17 sustainable development goals (SDGs). The goal targets energy sustainability and energy access for all by 2030.

Of the 17 SDGs, the ESCAP said in its “Asia and the Pacific SDG Progress Report 2023” in March that the region has made the most progress on SDG 7, along with industry, innovation and infrastructure (SDG 9).

“Delivering on the SDG 7 targets has been challenging but steady progress has been made by countries of the Asia-Pacific region,” the ESCAP Energy Division said in an e-mail to BusinessWorld. — Sheldeen Joy Talavera