The Department of Energy expects to finally put in place the country’s first Renewable Energy Market (REM) by next year, a move that is expected to further boost investments in the local clean energy industry.
Energy Undersecretary Josefina Patricia Asirit told reporters that the establishment of this market would depend on the results of the study being conducted by the United States Agency for International Development (USAID) and World Bank.
Asirit explained that the USAID is providing technical assistance via the conduct of the first phase of the study on the REM. An inception report, which will contain the features of the REM, is expected to be completed soon.
The second phase meanwhile will involve the World Bank, which provided a technical grant to craft the design for the REM.
Based on initial studies, Asirit said that the government may no longer create a new and separate market for renewable energy but may only include it as another commodity to be traded through the existing wholesale electricity spot market (WESM).
The REM is a critical mechanism for the RE industry as this will serve as a venue for the issuance, monitoring and, possibly, the trading of renewable energy certificates (RECs) which, in turn, will serve as proof of the energy companies’ compliance to the Renewable Portfolio Standards (RPS).
RPS is a mechanism provided under the Renewable Energy Act of 2008, which requires electricity suppliers/power distributors to source a portion of their electricity requirements from RE sources.
Based on the draft rules, the purpose of the RPS was “to contribute to the growth of the renewable energy industry by diversifying energy supply, spur socio-economic development in rural areas, and help address environmental concerns of the country by reducing harmful emissions.”
As such, Asirit stressed that the establishment of the REM must be consistent with the RPS rules.
The RPS rules must determine the fixed tariff to be paid for the electricity produced from each type of emerging renewable energy source.
