Government told to prioritize set up of renewable energy market

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The Manila Electric Co. (Meralco) said the proposed renewable energy market (REM) should be implemented ahead of the other policies aimed at increasing renewable energy (RE) production and meeting RE targets.

β€œTo date, there is still no operating REM, which is the venue where the accumulated RE Certificates of mandated participants are traded. We would like to respectfully note that the institution and operationalization of the REM is essential to ensure the smooth implementation and operationalization of the GEAP [Green Energy Auctions Program], GEOP [Green Energy Option Program] and this draft circular,” said Meralco Vice President and Utility Economics Head Lawrence Fernandez.

Under GEOP, consumers with peak demand of at least 100 kilowatts may choose RE as their source of electricity.

GEAP, meanwhile, covers power generation companies that will participate in the market as suppliers for consumers who qualify for the GEOP.

The third proposed RE policy is the adjusted annual percentage increment of the Renewable Portfolio Standards (RPS) for on-grid areas to 2.52 percent from the current 1 percent.

Fernandez, in a letter to the DOE, asked for the timeline of the establishment and commercial operation of REM.

The REM allows mandated participants, such as distribution utilities and retail electricity suppliers, to buy or sell RE certificates. This also helps them comply with RPS, a policy that requires them to source a portion of their power needs from renewable sources.

In the same letter, Fernandez told the DOE that any changes in the RPS percentage would require careful planning on their sourcing strategy and program. He said any increase in increment should consider that β€œwe are already in the third quarter of 2021; competitive selection process can take up to six months, resulting power supply agreements will need to undergo ERC [Energy Regulatory Commission] proceedings; and it takes two or more years to develop and construct a power plant.”

Fernandez appealed for mandated participants, such as Meralco, to be given enough time to comply with the proposed adjustment.

According to Department of Energy Assistant Secretary Redentor Delola, preparations for REM are underway. β€œI think the systems audit has just been completed. We are just finalizing the agreements on the use of the system. Go Live can be done this year but most probably without the trading of RECs since this has to be approved by the ERC.”

The DOE official assured that it will take into consideration the request of Meralco.

β€œWe are still going through all the comments  and position papers  submitted on the increase. As always, we will look into all their arguments,” Delola said in a text message.

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