More investments seen with new rules on renewable energy deals

Investors to the country are expected to flood in now with the recent release of the guidelines for the awarding of the renewable energy (RE) contracts.

The guidelines or rules, that are contained in a circular issued out by the Department of Energy (DoE), will cover RE projects on wind, solar, hydro, geothermal, ocean and biomass.

Under the rules, new and existing RE proponents can apply for a contract with the department provided that it will meet the legal, technical and financial requirements.

“This circular shall provide the guidelines on the award of renewable energy service/operating contracts covering both the development and pre-development stages either for power or non-power applications,” it said.

The circular also states that current or existing RE projects can be converted to RE contracts in order to avail of the incentives provided under the RE Law.

“Any individual or judicial entity with a valid and existing service or development contracts and agreements with the DoE/government…shall be deemed provisionally registered,” the circular said.

Awarding of the contract will be done through an open and competitive process or by direct negotiation.

But direct negotiations can only be conducted if there is only one applicant in the area.

The circular further said that processing and approval of the application will take no more than 30 days upon submission.

Also, the circular said the DoE will formulate a review committee that will look at the proposals of RE developers whether they meet the criteria.

Energy Assistant Secretary Mario Marasigan said that investors are interested in the RE projects development due to the attractive fiscal and non-fiscal incentives provided by the law.

“We have received letters of interest from more than 100 projects,” he said, detailing that the bulk of the proposals were for hydro power development as well as wind and biomass.

Earlier, Energy Secretary Angelo Reyes said they expect about US$9 billion to US$10 billion investment from renewable energy projects in the next 10 years.

The DoE also hopes to “double the power being generated from renewable energy sources with the existing 4,500 megawatts (MW) to 9,000 MW in 10 years.”

Renewable energy projects are estimated to cost US$ 1 million to US$2 million per MW.

At present, renewable energy comprise 33 percent of the country’s power generation mix.

The guidelines also mandate the creation of a renewable portfolio standard system which requires power suppliers to source a minimum percentage from renewable energy within one year as well as the formulation of a feed-in tariff or power rate from each type of RE resource for a period of not less than 12 years.

Furthermore, the circular stated that the RE committee will be given one week to complete the review and evaluation of the proposals and applications before it submits its recommendation to the DoE secretary to whether approve or reject the contract. –with a report from PNA