A report from Institute for Energy Economics and Financial Analysis (IEEFA) shows that the Philippines could attract USD20 billion investments in renewable energy over the next decade through auctions while it will also lower the cost for consumers and industries.
As the government will introduce the Green Energy Tariff Program (GETP) this year, IEEFA report said the Philippines is perfectly positioned to take advantage of improving the auction process to lure more investments and secure low cost renewable energy for the next 10 years.
Auctions are setting record low generation prices globally. In an emerging market such as the Philippines, every dollar saved matters and every opportunity to increase added value matters, IEEFA Financial Analyst Sara Jane Ahmed said.
In the report, it was cited that India, Brazil, Chile, and Peru have utilized competitive auctions and are expected to surpass the capacity targets, while renewable energy costs to consumers and industries are lower than the forecasted prices.
A similar auction process was rolled out in Cambodia, wherein it attracted 26 initial global and domestic bidders and landed a final bid of USD0.03877 per kilowatt hour (PHP1.93 per kWh).
Auctions improve transparency on getting access to the grid and make it easier to raise finance at a viable rate, setting record low generation prices globally," Ahmed added.
Among her recommendations for the GETP is selecting appropriate technologies for different locations in the country.
Grid and transmission systems shall be reviewed to plan for future absorption of renewable energy, Ahmed said.
The government should also revisit the foreign ownership in this sector to attract global capital.
Under the first phase of GETP, it targets to install 2,000 megawatt capacity and attracting USD2 billion worth of investments.
Ahmed said with the competitive auction process, the government will be able to meet its target and attract global investments.
She added there are available funds in the global market such as China's Belt and Road Initiative, as well as clean energy funding programs from the Asian Infrastructure Investment Bank and Asian Development Bank.
The Department of Energy can achieve even better pricing by refining its competitive auctions framework, Ahmed stressed.
Source: Philippines News Agency