Auctions to lure $20b green deals in the Philippines

The government was urged to utilize auctions to reach 2030 targets.

The Philippines could attract as much $20b in renewable investment over the next decade through auctions in and beyond the proposed Green Energy Tariff Program, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

The report recommended for the government to jumpstart competitive auctions for the Green Energy Pricing Program’s 2GW immediate target, and then utilize auctions to reach 2030 targets and beyond.

In particular, IEEFA financial analyst Sara Jane Ahmed suggested focusing on selecting the most fitting energy technologies for different locations, reviewing the grid and transmission systems to plan for future absorption of renewable energy, and lifting or revising foreign ownership restrictions.

“Emerging markets such as the Philippines are well-positioned to attract low-cost global capital to fund the development of renewable energy infrastructure. The result will be competitive pricing enabling low cost electricity and reduced capital costs,” she added.

She also recommended that the auctions be run by the Independent Electricity Market Operator of the Philippines, noting that this will ensure transparency and competitiveness.

The report noted that the Asian Development Bank facilitated a similar auction process in Cambodia, which attracted 26 initial global and domestic bidders and landed a final bid of $0.03877 per kWh.

With the aim of luring in more investments in the green energy sector, the country’s Department of Energy has proposed Green Energy Tariff Program, which would establish pricing for solar, wind, and other renewable energy.

“This leadership by the Department of Energy will enable lower pricing for consumers and industry, whilst ensuring a more secure supply of domestic renewable power,” Ahmed said.