February 19 (Renewables Now) - The Philippine government plans to auction 2 GW of renewable power capacity as part of the department of energy's Green Energy Tariff Program to be launched this year, according to a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA).
A programme draft shows that the tenders will include a price ceiling for the renewable power generated by the projects. The report suggests that the department of energy can refine its auctions framework in view of the competition shortcomings of earlier policies. In this way it can create a system promoting competition and flexibility, while also being resource efficient.
The report gives as an example experience from India, Brazil, Chile and Peru that shows that thanks to competitive actions, new capacity goals can be topped and prices can fall below the expected level. This experience suggests that the Philippines government should make specific auctions for different regions and resources to ensure maximum price competition and resource efficiency.
Sara Jane Ahmed, report author and IEEFA financial analyst, says that competitive auctions could be the key to achieving not just the immediate 2-GW target but also to attract up to USD 20 billion (EUR 18.5bn) in global capital to be invested in 20 GW of renewable power capacity over the next ten years.
The report notes that competitive auctions can make the renewable power sector more transparent and competitive, which would lead to lower electricity prices for consumers and increased volumes of renewable energy across the country. Thus the government programme can lead to renewable power prices lower than PHP 2.75 (USD 0.054/EUR 0.050) per kWh.
(PHP 10.0 = USD 0.198/EUR 0.183)
(USD 1.0 = EUR 0.926)