DC2020-07-0017 (Original GEA Policy)

Department Circular No. DC2020-07-0017 Promulgating the Guidelines Governing the Policy for the Conduct of Green Energy Auction in the Philippines Issued: 2020 | Secretary Alfonso G. Cusi

Overview

DC2020-07-0017 established the original “Green Energy Auction (GEA) Policy” — the founding framework for competitive RE procurement through an auction mechanism. It introduced the pay-as-bid Green Energy Tariff, the GEAR Price ceiling set by ERC annually, the two-track auction structure (Supply-Only and Integrated OCSP-Supply), and the explicit links to CSP and RPS compliance. Superseded by DC2021-11-0036 (3 November 2021), which added the FIT-All funding channel and the Opt-In Mechanism [DC2020-07-0017, §§1–19, 2020].

Statutory Basis

• RA 7638 §5(b) — DOE program development mandate
• RA 9136 §2 and §37(e)(i) — EPIRA policy; DOE mandate to encourage private sector RE investment
• RA 9513 — RE Act; RPS mandate under §6

Immediate trigger: 2011-2030 NREP assessment showing total installed RE capacity as of December 2018 was 3,608 MW below target, with RE generation share reduced to below 24% [DC2020-07-0017, recitals, 2020].

GEA Policy Structure (5 Rules, 19 Sections)

Key Provisions

Green Energy Tariff (Rule 2 / Section 5)

• Pay-as-bid: each Winning Bidder receives its offered price in PhP/kWh
• GEAR Price = ERC-determined ceiling per technology, issued to DOE by 31 May each year in strict confidentiality
• GEAR Price covers: Luzon-Visayas combined, Mindanao; peak vs. off-peak; or per technology
• Winning bids below GEAR Price are authorized for collection from captive customers without further ERC approval [DC2020-07-0017, §§5.1–5.4, 2020]

Two Auction Types (Section 7.1)

1. Supply-Only Auction — awards only a Green Energy Implementation Agreement (GEIA); eligible: RE projects already covered by RE Contracts (pre-development or development stage)
2. Integrated OCSP-Supply Auction — awards RE Contract + GEIA in an integrated OCSP process; provisions of this Circular apply to formulating applicable rules

[DC2020-07-0017, §7.1, 2020]

Qualified Customers (Section 7.2)

All Mandated Participants under the RPS On-Grid Rules (DC2017-12-0015) are deemed enrolled. Exclusion mechanisms:

• Mandatory Exclusion — DOE Secretary declares exclusion based on legal/technical/financial position per GEAC recommendation
• Voluntary Exclusion — filed with GEAC ≤20 days after Notice of Auction publication; requires sworn certification that the participant will conduct its own competitive RE procurement. Voluntary exclusion applies only to the specific auction round [DC2020-07-0017, §7.2, 2020]

Auction Mechanics (Section 8)

• Notice of Auction: Published by DOE on website and in ≥1 newspaper by 15 June each year; emailed to ERC and all Mandated Participants
• Electronic bidding platform: DOE procures technology; GEAC assigns user-specific electronic IDs
• Qualified Suppliers register with GEAC; GEAC verifies and issues list; Pre-Bid Conference ≥20 days before auction
• GEAR Price disclosed upon opening sealed ERC envelope on auction day; bids ranked lowest to highest; at-or-below GEAR bids declared Winning Bidders [DC2020-07-0017, §8, 2020]

Percentage Volume Allocation (Section 6.3)

Three-scenario allocation formula [DC2020-07-0017, §6.3, 2020]:

• If total registered supply = consolidated RPS requirement: each customer’s PVA = its RPS requirement / total registered volume
• If supply < RPS requirement: each customer’s PVA = its RPS requirement / consolidated RPS requirements
• If supply > RPS requirement: highest-price bids excluded until supply matches requirement; each customer’s PVA = its RPS requirement / consolidated RPS requirements

Maximum awarded volume = consolidated RPS requirement (no over-contracting) [DC2020-07-0017, §6.4, 2020]

CSP and RPS Compliance Links

Section 13 (CSP compliance): A DU contracting through the GEA is deemed compliant with CSP requirements under DC2015-06-0008 as amended by DC2018-02-0003 [DC2020-07-0017, §13, 2020].

Section 14 (RPS compliance): RE volume supplied under GEIAs counts toward Mandated Participants’ RPS obligations under DC2017-12-0015 [DC2020-07-0017, §14, 2020].

GEAC Composition

GEAC = the RPS Composite Team established under DC2017-12-0015 with additional powers and functions under this Circular, headed by the DOE Assistant Secretary designated to lead the RPS Composite Team [DC2020-07-0017, §4.5, 2020].

Market Operator Role (Section 12)

MO enters GEIA to acknowledge party obligations; calculates average price (PhP/kWh) and facilitates payment to the extent required under WESM Rules [DC2020-07-0017, §12, 2020].

Structural Differences from DC2021-11-0036

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