DOE vows to cancel offshore wind projects delayed by 3 years
The Department of Energy (DOE) is taking a stricter approach to unserious renewable energy developers, as it warned that it would revoke the contract of offshore wind projects delayed by more than three years.
The agency made this known during its virtual dialogue with industry stakeholders on Monday, which was meant to refine the draft terms of reference for the fifth round of the green energy auction (GEA-5).
This new bidding round is focused on offshore wind developments.
The GEA is designed to expand the renewable energy market in the Philippines while providing developers with incentivized fixed power rates.
“To safeguard the integrity of the auction process, the DOE announced that delays exceeding three years due to developer default will result in the revocation of the Certificate of Award and the Certificate of Endorsement for the Green Energy Tariff,” it said in a statement on Tuesday.
But the DOE said lenders’ “step-in rights” would still be considered, allowing them to take over project control before imposing revocation.
The DOE began purging inactive or idle renewable energy projects late last year, starting with about 105 players.
In January, energy officials said they were reviewing another batch of delayed renewable projects. While some could be terminated, the projects could still be revived as developers are allowed to submit a request for consideration.
Then Energy Secretary Raphael Lotilla brushed off notions that this move could delay progress in the industry, saying this “in fact, encourages more serious investments in the renewable energy sector.”
Meanwhile, under the GEA-5, about 3,300 megawatts of offshore wind capacity will be available. The delivery is set from 2028 to 2030.
The DOE is urging potential bidders to submit infrastructure plans to support interagency coordination.
It also noted that only bank guarantees, irrevocable standby letters of credit, or cash would be accepted as performance securities. Surety bonds will no longer be permitted.
“We are working to make the process more responsive to real project conditions and more consistent across the board,” said Energy Undersecretary Rowena Cristina Guevara.
