Renewable Energy Developers Subject to Cancellation of Bid Bond – Manila Bulletin

Renewable energy (RE) developers, who have been awarded 20-year power supply contracts (PSAs) under the Green Power Auction Program (GEAP), risk the cancellation of bid bonds if they fail to provide the committed capacity.

Cancellation of bid bonds by Principal Undersecretary for Energy Felix William B. Fuentebella awaits renewable energy developers who cannot meet the target commercial operation date (COD) as well as delivery subsequent capacity required of their projects.

The Bid Bond, which is 20% of the RE project cost, is one of the key requirements to be submitted by a qualified bidder, as stipulated in the Terms of Reference (TOR) of the RE auction administered by the Department of Energy. .

“If (the developer of the RE project) cannot deliver, we will not pay. We will call on the company’s bid bond,” he said.

PSAs awarded to RE developers, he explained, are anchored on a “pay-as-you-go basis,” which means payment for capacity must be based on generated capacity to deliver and price. payment calculated on the winning price offer of a specified developer.

The energy chief also explained that in allocating 1,966.93 megawatts of renewable energy capacity on June 24, the Green Energy Auction Committee allowed an oversubscription for solar technology on the basis of the terms of reference of the renewable energy tendering process.

Primarily, the auctioned solar capacity for the Luzon grid was set at 900 MW, but the awarded contracts covered a total capacity of 1,070.38 MW; and the same goes for the Visayas grid, whose auctioned solar capacity was 260 MW, but the allocated capacity reached 300 MW while for the Mindanao grid, the auctioned capacity was set at 100 MW but the assigned capacity fluctuated at 120 MW.

Under clause 7.3.2.2 of ER’s auction terms of reference, it was stated that “in the event that the quantity offered by a bidder becomes the marginal bid, but the quantity bid exceeds the requirement capacity of the auction after ranking and aggregation of bids, the total quantity offered by the bidder will be included as the winning bid, provided that the excess quantity offered by the bidder does not exceed 20% of the capacity requirement of the RE installation auction per network.

If the marginal supply exceeds the prescribed 20% allocation, Fuentebella said the winning RE developer will be asked to “reduce capacity” within the allowed oversubscribed capacity.

The other option for the bidder, he noted, is for them to “opt out of the auction”, without forfeiture of their bid bond.

The tender conditions further specified that in the event of the withdrawal of the tenderer, “the next tenderer will be considered to be subject to the same conditions”.

The initial auction of 2,000MW of renewable energy capacity under the outgoing Duterte administration is just the first round of a series of tenders scheduled for Renewable Portfolio Standards (RPS) compliance. mandated participants, primarily distribution utilities (DUs) which are required to secure a certain percentage of their supply from renewable energy generated sources.

As the Department of Energy pointed out, the RE capacities that would be put up for tender in the short term would be in the range of 4,000 to 5,000 megawatts.

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