Philippines introduces priority dispatch for renewables, opens market to 100% foreign investments

The Department of Energy (DoE) of the Philippines has revealed that all renewable energy assets will be granted preferential dispatch in the Wholesale Electricity Spot Market (WESM). The DoE said that the preferential lane will be given to plants operating under the “Must Dispatch” and “Priority Dispatch” categories.

The first one is represented by all renewable energy facilities powered by wind, solar, run-of-river hydro, or ocean energy, regardless of whether they are being operated under the feed-in tariff (FIT) scheme.

“The enjoyment of ‘Must Dispatch' is based on the difficulty to precisely predict the availability of RE resource, thereby making the energy generated variable and irregular and the availability of resource inherently uncontrollable pursuant to Section 20 of the Renewable Energy Act,” said the DoE.

The second category only covers biomass plants operating under the FIT system.

“Granting all generating units utilizing RE resources either ‘Must Dispatch' or ‘Priority Dispatch' will aid in accelerating the development and utilization of indigenous RE resources and reduce the dependence on imported conventional energy sources,” said Energy Secretary Carlos Jericho Petilla. “This will minimize the country’s exposure to price fluctuations in the global market, making the supply and delivery of electric power more stable and secured from international geopolitical conflicts.”

In addition, the DoE has also started to review the Renewable Energy Act, which was issued in 2008. It aims to amend the rule requiring renewable energy projects to be at least 60% owned by domestic investors.

However, local media reports suggest that the measure will help the country to achieve its renewable energy targets.

“The DoE is preparing the necessary amendments to Rule 6, Section 19 of the IRR of the RE Law,” said Lotilla.

The country plans to install 15 GW of clean energy by 2030. Recent statistics from the International Renewable Energy Agency show that the Philippines had an installed PV capacity of 1.08 GW at the end of 2021. Most of the nation’s solar facilities were secured under the old feed-in tariff regime, auctions, and net metering programs.