By Victor V. Saulon – December 25, 2019 | 8:48 pm
from Business World
THE Department of Energy (DoE) has warned holders of renewable energy (RE) certificates not to hold on these tradable instruments once the trading market starts to operate next year as their life is limited only to three years.
“Ang buhay ng isang RE certificate is three years lang. So risk nya ‘yun kung mag-ipon siya ng marami at ‘di niya ma-dispose kasi mawawalan ng value siya after three years (RE certificates are only good for three years. It’s a risk to accumulate them because disposing of them is not certain),” said Mylene C. Capongcol, director of the DoE’s Renewable Energy Management Bureau, in an interview as the agency prepares for the commercial operation of the Philippine Renewable Energy Market System (PREMS).
Ms. Capongcol issued the warning as she called on the mandated participants in the RE market to sign up with the registry, which will be supervised by the Philippine Electricity Market Corp. (PEMC).
“Next year is the full determination of the criteria for the commercial operation of REM (renewable energy market). So (that includes) testing (and) registration of the members,” she said.
By January 2020, the RE registrar is expected to be able to use the PREMS as a tool to ensure that industry participants comply with the requirements of the Renewable Portfolio Standards (RPS) and other policy mechanisms provided for by Republic Act No. 9513 or the Renewable Energy Act of 2008.
RPS requires distribution utilities, including electric cooperatives and retail electricity suppliers, to source or produce a fraction of their electricity requirements from eligible RE resources.
The mechanism is meant to develop indigenous and environmentally friendly energy sources. It sets a minimum annual incremental requirement for the RPS participants, who can opt to buy RE certificates from the market as compliance to the law.
The RE registrar tracks the compliance of about 130 on-grid utilities out of the country’s 151 entities, Ms. Capongcol said. The PREMS, the online platform, will facilitate market competitiveness, efficiency and transparency in the trading of RE certificates.
Alberto R. Dalusung III, who served as a consultant for biomass projects and a member of Biomass Renewable Energy Alliance, Inc. (BREA), described the certificates as the “environmental attributes” of renewable energy generation.
“Every time you generate 1 megawatt-hour equivalent, (you have) one certificate,” he said. “(There are) mandated parties that will have to have the certificates to back up their own consumption of energy.”
The RE market gives biomass power plant developers another outlet to generate revenue aside from selling their output to the electricity market. The price of the RE certificate will be determined by the market as buyers and sellers negotiate.
“(There’s) another market for the certificates. It’s another market separate from the market for the power. This is the market for the environmental attributes of the power,” he said. “It’s a way for recognizing that renewable energy helps the environment.”
Joseph S. Yu, president and chief executive officer of SN Aboitiz Power (SNAP), said the company is awaiting the mechanics of the RE market.
“I think there is value in REMS (renewable energy market system) because we think there is a lot of value with the RPS, renewable portfolio standard. But for RPS to really take off, REMS must be done right and people must be comfortable and confident that those certificates can be traded easily and transparently. If we can get that piece right then RPS can take off and help us realize the promise of renewable energy,” he said.
SNAP is a joint venture of Norway’s SN Power AS and listed energy company Aboitiz Power Corp. It generates power mostly through hydroelectric plants. It also has a retail electricity supply business.