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are entitled to the applicable FiT rate for a
period of 20 years. 59 When the FiT was newly
implemented in 2012, the ERC set the FiT
rate for wind energy at PhP 8.53 per kWh,
with a 0.5% degression rate after 2 years
from the effectivity of the FiT. Thereafter, in
2015, the ERC resolved to set a new wind FiT
rate of PhP 7.40 per kWh, which was applied
to three wind power projects. 60 Now that
the installation targets for wind energy have
been fully subscribed, succeeding wind
energy projects shall now be made through
an auction system,61 now being implemented through the GEAP.
The difference between the FiT program and
the GEAP lies in the determination of the
tariff. Under the FiT, the ERC approves the
FiT rates, while under the GEAP, the Green
Energy Tariff (GET) is determined through
a conduct of a competitive auction. The
GET is the price per kWh, resulting from the
conduct of the auction corresponding to
each winning bidder on a pay-as-bid basis. 62
In other words, the price offered by the
winning RE developer under the GEAP shall
be the GET. The ERC sets, however, a Green
Energy Auction Reserve Price (GEAR Price).
The GEAR Price is the maximum price in PhP
per kWH set by the ERC that shall operate as
the price cap for the auction.
Republic of the Philippines
Under the first round of auction under the
GEAP approved by the ERC in May of 2022,
the GEAR price for wind was set at PhP
6.0584 per kWh. The approved GEAR Price
considered the comments and inputs of
all relevant stakeholders during a public
consultation. Notably, the GEAR Prices for all
RE were lower or within the range of recent
PSAs. 63 The financial model used by the ERC
does not allow any escalation or adjustment due to changes in forex and inflation,
therefore, the GEAR Prices are fixed during
the whole life of the project. 64 As a result of
the first round of auction, the DOE awarded
19 contracts for all RE resources. Five wind
projects won contracts at the following
winning bids:
(a) 70 MW of capacity for PhP 3.86 per kWh;
(b) 30 MW of capacity for PhP 4.1998
per kWh;
(c) 160 MW of capacity for PhP 4.4386
per kWh;
(d) 100.8 MW of capacity for PhP 4.6368
per kWh; and
(e) 13.2 MW of capacity for PhP 5.755
per kWh. 65
59 Energy Regulatory Commission, Resolution No. 16019.
60 Energy Regulatory Commission Case No. 2022-051.
61 Department of Energy, Circular No. DC 2015-07-0014.
62 Department of Energy, Circular No. DC2020-07-0017.
63 Energy Regulation Commission, ERC Sets GEAR Prices for the First Round of Green Energy Auction, available at https://www.erc.gov.ph/ContentPage/82733 (last accessed March 1, 2023).
64 Id.
65 Department of Energy, Notice of Award: List of Winning Bidders for GEA-1, available at https://www.doe.gov.ph/geap?q=geap/notice-of-award (last
accessed March 24, 2023).
