The government yesterday launched the second round of open and competitive selection process (OCSP 2) for renewable energy deals, reducing the number of hydropower sites up for development due to “local issues” that have yet to be resolved.
Materials distributed during the OCSP 2 launch at Dusit Thani Manila in Makati City showed the Energy department is offering four geothermal sites and 17 hydropower sites — compared to 20 initially — with aggregate potential capacity of more than 867 megawatts (MW).
The 21 areas are less than the 24 sites the department previously announced after taking into account results of studies, location and existing infrastructure to transmit power, Mario C. Marasigan, director of the department’s Renewable Energy Management Bureau, told reporters at the sidelines of yesterday’s launch.
Issues
“The reduction of target sites resulted from concerns during stakeholders’ consultation,” Mr. Marasigan said.
“There are questions on the readiness of the NCIP (National Commission on Indigenous Peoples) and local government units. Is there conflict in the area? If we were not able to resolve those issues, we didn’t include them,” he explained.
The Energy department is working to address such issues which, once resolved, will enable the government to include the sites concerned in the next auction round, Mr. Marasigan said.
“There… are already more than 300 participants here and the beauty of it is there are many diplomatic corps… representatives here, so that means interest for the development of renewable energy is huge,” Mr. Marasigan said of yesterday’s launch.
The Energy department also yesterday started to make bid documents available to interested parties.
Guidelines governing OCSP 2 for renewable energy service contracts — the first round was conducted in 2009 — published in a newspaper yesterday bared the following timetable:
- pre-bid conference on March 20;
- submission, opening and start of evaluation of proposals on May 4;
- end of offer evaluation on Aug. 4; and
- awarding of renewable energy service contracts on Sept. 4.
The guidelines also set legal, financial and work program requirements and procedures, as well as criteria for project proponents.
Under OCSP 2, the Energy department will offer four geothermal sites with aggregate potential capacity of up to 134 MW and 17 hydropower sites with aggregate potential capacity of up to 733.4 MW.
The geothermal sites that will be offered are located in Itogon, Benguet; Southern Leyte; Compostella Valley; and Davao Occidental, while the hydropower resources are spread across the country: six in Luzon, eight in the Visayas, and three in Mindanao.
Proponent must be a current power plant operator, a partner in a consortium or of a corporation operating a power plant, or holder of a renewable energy service contract in good standing with the Energy department.
Contract period consists of a pre-development stage of two years for less than 50 MW and five years for at least 50 MW. Development stage will run for 25 years from effectivity of the contract, renewable for not more than 25 years.
The winning bidders will also enjoy all the benefits provided under Republic Act No. 9513, or the Renewable Energy Act of 2008, such as a seven-year income tax holiday (ITH), reduced corporate tax rate of 10% after ITH expires, and duty-free importation for 10 years of equipment, machinery, spare parts and materials directly, actually and exclusive used for hydropower or geothermal operation.
The government will have a 1% share of gross income in the case of hydropower projects, and 1.5% for geothermal ventures.
Data from the Energy department showed that as of end-November last year, the government had awarded 650 renewable energy contracts since the passage of the Renewable Energy Act of 2008.
“We’ll try to see the outcome [of this round],” Mr. Marasigan told reporters yesterday.
We’re looking for possibilities to include wind [in the OSCP].”
