# DC2021-11-0036 — Revised GEAP Guidelines ## Department Circular No. DC2021-11-0036 **Providing the Revised Guidelines for the Green Energy Auction Program in the Philippines** Signed: 3 November 2021 | Secretary Alfonso G. Cusi Effectivity: 15 days after filing with UP Law Center-ONAR and publication in at least two newspapers of general circulation Repeals: DC2020-07-0017 Amended by: DC2023-09-0027, DC2025-03-0004, DC2025-06-0009 Superseded (non-FIT): DC2023-10-0029 (for geothermal and impounding hydro under separate policy) --- ## WHEREAS RECITALS 1. RA 7638 §5(b)(c)(h) — DOE mandate to develop comprehensive energy program (preferential bias for environment-friendly, indigenous, low-cost sources; privatization/deregulation direction); establish energy distribution programs; formulate and implement program for accelerated development of non-conventional energy systems. 2. RA 9136 (EPIRA) §2 — policy for quality, reliability, security, and affordability of electricity supply; fair treatment; socially and environmentally compatible infrastructure; promotion of indigenous and RE resources to reduce dependence on imported energy. 3. EPIRA §37(e)(i) — DOE mandate to encourage private sector RE investment; §37(i) — develop energy development incentive policies; §37(j) — environment conducive to private sector participation; §37(p) — formulate implementing rules. 4. RA 9513 (RE Act) — State policy to increase RE utilization through institutionalized development of national/local capabilities; DOE as lead agency (§5). 5. DOE supply-demand simulations: country needs immediate additional capacities to serve increasing electricity demand and system security requirements. 6. DC2015-07-0014 §4 — mandated that successive FIT installations after full subscription of existing targets shall be through an auction system. 7. ERC FIT Rules: (1) Resolution No. 16, Series of 2010 (FIT Rules); (2) Resolution No. 18, Series of 2014 (REPA and RESA templates). 8. Since RE Act implementation, cost of RE has declined, resulting in lower contracted generation rates — competitive bidding under GEA is one of the best ways to accelerate RE development, encourage private sector investment, and provide adequate capacity. 9. The GEA Program requires full engagement and utmost cooperation of all stakeholders; the ERC shall adopt and implement DOE rules consistent with said policies. --- ## RULE 1 — GENERAL PROVISIONS ## SECTION 1. TITLE "Providing the Revised Guidelines for the Green Energy Auction Program in the Philippines" — hereafter referred to as the "GEAP Guidelines." --- ## SECTION 2. PURPOSES AND OBJECTIVES 2.1 **Purposes:** - 2.1.1 Establish implementation framework for GEAP and provide clarity on roles of implementing agencies/entities; - 2.1.2 Support and facilitate immediate and timely investments in new or additional RE capacities to ensure adequate supply and competitive electricity rates; - 2.1.3 Support development of new RE projects under a competitive process, together with long-term contracts; and - 2.1.4 Implement the mandate of giving preference to RE sources for a cleaner and sustainable environment. 2.2 **Objectives:** - 2.2.1 Promote RE growth as one of the country's primary energy sources for energy security and self-reliance; - 2.2.2 Implement RE Act mandate to prioritize RE capacity connection and building; - 2.2.3 Ensure transparent and competitive selection of RE facilities to achieve reasonable rates and encourage best RE entrants; - 2.2.4 Support energy security by adding new capacities, ensuring adequate and sustainable supply (short- to medium-term); - 2.2.5 Address price volatility in RE procurement and REC pricing by increasing REC availability in the RE Market; - 2.2.6 Enhance RE programs by promoting competitive rate-setting for RE supply; - 2.2.7 Assist RPS Mandated Participants by increasing REC allocation from GEAP; and - 2.2.8 Ensure utilization of efficient RE technologies for low-carbon energy sector shift. --- ## SECTION 3. SCOPE AND COMPONENTS 3.1 **Scope:** This Circular applies to: 1. RE Developers/Generators; 2. RPS Mandated Participants; 3. National Transmission Corporation (TransCo); 4. National Grid Corporation of the Philippines (NGCP) System Operator; 5. Market Operator; 6. RE Registrar; 7. Distribution Utilities; and 8. Electricity end-users. 3.2 **Components:** - 3.2.1 **Green Energy Tariff** — provides price signals for RE electricity value from competitive process; sets benchmark price for DUs under the Opt-In Mechanism; - 3.2.2 **Green Energy Auction** — facilitates determination of RE facilities eligible under GEAP; administered by DOE through the GEAC. --- ## SECTION 4. DEFINITION OF TERMS Adopts by reference terms from EPIRA, RE Act and IRRs, RPS On-Grid Rules, Omnibus RE Guidelines, WESM Rules, and FIT Rules (insofar as consistent). Additional definitions: - **ARP (Auction Round Procedures)** — procedures for each GEA round - **Certificate of Award** — issued by DOE to Winning Bidders; basis for Certificate of Nomination/Endorsement for GET eligibility - **COE-GET (Certificate of Endorsement for Green Energy Tariff)** — certificate issued by DOE upon GEAC recommendation confirming readiness to inject power to the grid by the Winning Bidder; determination of readiness considers widely-accepted industry standards for the applicable RE technology - **Green Energy Auction / Auction / GEA** — competitive process for RE supply procurement under this Circular (Rule 3) - **GEAC (Green Energy Auction Committee)** — reconstituted committee under Section 11; headed by the Assistant Secretary designated to head the RPS Composite Team - **GET (Green Energy Tariff)** — pay-as-bid price in PhP/kWh resulting from each GEA per Winning Bidder - **GEAR Price (Green Energy Auction Reserve Price)** — ERC-determined maximum price in PhP/kWh; ceiling price for particular ARP - **Mandated Participants** — electric power industry participants obligated to comply with RPS Rules based on minimum annual requirements set by DOE upon recommendation of the RPS Composite Team - **Market Operator** — Independent Market Operator of the WESM (EPIRA-created) - **New and Existing Capacities** — RPS eligible facilities as defined in the RPS On-Grid Rules - **Notice of Auction** — written notice by DOE (Section 9.1) - **Qualified Suppliers** — DOE-registered RE Developers/Generators under Omnibus RE Guidelines, eligible to participate per GEAC (Section 6.1) - **Qualified Bidders** — Qualified Suppliers notified of qualification and furnished user-specific electronic IDs (Section 9.9) - **REC (RE Certificate)** — certificate issued by RE Registrar representing renewable and environmental attributes from 1 MWh of eligible RE generation - **Winning Bidder** — Qualified Bidders determined to have the most responsive bid or offer in a particular auction bid round --- ## RULE 2 — GREEN ENERGY TARIFF ## SECTION 5. PRICING PRINCIPLES 5.1 **General Principle:** GET reflects value of RE electricity from a competitive process; Winning Bidder has the most competitive bid price offered based on the TOR for a particular ARP, as determined by GEAC. 5.2 **Pricing Unit:** GET expressed in PhP/kWh basis, consistent with RPS On-Grid Rules and FIT Rules. 5.3 **Price Determination:** Price offered by the Winning Bidder is the GET. The ERC includes the GET in its computation of the FIT-All for the GEA. --- ## RULE 3 — GREEN ENERGY AUCTION ## SECTION 6. FRAMEWORK FOR THE AUCTION 6.1 **Eligible Capacity (Offer):** - 6.1.1 RE facilities built and to be built after the RE Act with no existing PSA/PPA with any DU or end-user at the time of the agreed delivery date; - 6.1.2 Pre-RE Act RE facilities that underwent expansion or upgrading — **incremental capacity only**, separately installed with separate metering; incremental generation deemed eligible for RPS compliance by Mandated Participants; - 6.1.3 **Geothermal and impounding hydropower** — DOE upon GEAC recommendation shall develop a specific auction policy or separate remuneration package under the GEA; and - 6.1.4 Other emerging RE technologies may be included in GEAP and FIT as determined by DOE. 6.2 **Auction Capacity Requirement:** GEAC guided by: - 6.2.1 Capacity needed by the grid for sufficient supply; - 6.2.2 Levels of RE to maintain RE generation mix target set by DOE; and - 6.2.3 Volume of RECs in the market for RPS compliance of Mandated Participants. --- ## SECTION 7. GEA GUIDING PRINCIPLES - 7.1 Auction conducted for New and Existing RE Capacities duly registered with DOE, with no existing PSA/PPA with any DU or end-user at delivery date; - 7.2 Participating entities shall be allowed full recovery of prudent and reasonable economic costs; Winning Bidders' bid offers considered their prudent and reasonable economic costs; - 7.3 Efficiency and competitive electricity prices shall be promoted; - 7.4 Fair and transparent processes observed in all stages; and - 7.5 Clean and sustainable energy forms will be harnessed. --- ## SECTION 8. GEAR PRICE DETERMINATION ERC determines GEAR Price(s) under each ARP. Initial GEAR Price and methodology: issued by ERC **within 60 days** of Notice of Auction for the first auction round. Subsequent rounds: GEAR Price issued **within 30 days** of Notice of Auction. --- ## SECTION 9. AUCTION PROCESS 9.1 **Notice of Auction:** Published on DOE website and in ≥1 newspaper; copy sent to ERC, TransCo, and Market Operator. Indicates coverage for Luzon, Visayas, and Mindanao (per grid or as a whole); capacity and equivalent energy generation; consideration of interconnection limits and grid security. 9.2 **Issuance of GEAR Price:** ERC issues to DOE in accordance with Section 8. 9.3 **TOR and ARP Issuance:** DOE issues ≥15 days prior to first day of registration for each auction round. 9.4 **Registration:** Qualified Suppliers register with GEAC by submitting: (1) Letter of Intent signed by authorized representative; (2) Proof of authority; (3) Work Program; and (4) Proof of payment of registration and processing fee. 9.5 **Evaluation of Qualified Suppliers:** GEAC evaluates per TOR and ARP; declares Qualified Bidders. List posted on DOE website prior to Pre-Bid Conference; Qualified Bidders notified by email. 9.6 **Issuance of IDs:** GEAC issues user-specific electronic IDs to Qualified Bidders. 9.7 **Pre-Bid Conference:** Provides details and answers questions. Post-conference questions addressed via bid bulletin posted on DOE website. 9.8 **Bid Bond and Affidavit of Undertaking:** Submitted by Qualified Bidders up to one (1) working day before Auction Proper. Physical copies of: (1) proof of bid bond posting; and (2) Affidavit of Undertaking to deliver committed capacities on delivery date. Affidavit indicates total supply capacity per delivery period, including RE technology type and delivery period/contract term. 9.9 **Auction Proper:** Qualified Bidders bid capacity (MW) and price (PhP/kWh) through electronic platform using user-specific IDs. Qualified Bidders must offer entire capacity of the RE facility. GEAC ranks offers lowest to highest bid price; declares Winning Bidders; issues Notice of Award with Certificate of Award. 9.10 **Certificate of Award:** Issued by DOE to Winning Bidder; indicates Winning Bidder name, capacity, eligible RPS facility/ies, and GET for issuance of Certificate of Nomination/Endorsement for GET eligibility. 9.11 **Post-Auction Documents:** All Winning Bidders submit performance/completion bond and other requirements per TOR. 9.12 **COE-GET:** Winning Bidder follows procedures under DC2013-05-0009 §6 for issuance of COE-GET; must attach Certificate of Award to the notice under §6(a). Upon DOE confirmation of Successful Commissioning, Winning Bidder deemed ready to inject power and entitled to COE-GET. 9.13 **Post-Auction Procedures:** After securing COE-GET, Winning Bidder complies with ERC Resolution No. 16, Series of 2014 (2014 Revised COC Rules). COE-GET is treated as equivalent to the Certificate of Endorsement for FIT Eligibility for purposes of securing ERC Certificate of Compliance. --- ## RULE 4 — GENERAL PROVISIONS FOR OPT-IN MECHANISM ## SECTION 10. OPT-IN MECHANISM To reduce FIT-All charges and meet DU supply and RPS requirements, DUs may voluntarily procure from the GEAP pool of a Winning Bidder in a particular auction round, thereby carving out such DU-procured volumes from the pool compensable by FIT-All. 10.1 Opt-In Mechanism governed by guidelines to be issued by DOE upon GEAC recommendation and after stakeholder consultation, within **30 days** of effectivity of this Circular. General principles: - 10.1.1 Generation cost under the DU-Winning Bidder contract = offered price or blended offer price of Winning Bidder(s) in that auction round; charged by DU against captive customers; corresponding RECs from "Opt-In Capacity" generation accrue to the DU off-taker; Winning Bidder still paid its offered price after Opt-In; - 10.1.2 Opt-In Capacity deducted from GEA capacity; - 10.1.3 GEA capacity and FIT-All Fund calculation basis decreased according to Opt-In Capacity contracted by DUs; and - 10.1.4 GET (PhP/kWh) corresponding to Opt-In Capacity Volume charged against Opting-In Participants as part of generation charge payable by relevant captive customers (not against FIT-All Fund). 10.2 Formulation of Opt-In Guidelines shall not delay the conduct of the first GEAP auction round. --- ## RULE 5 — GREEN ENERGY AUCTION COMMITTEE ## SECTION 11. RECONSTITUTION OF THE GEAC GEAC reconstituted and headed by the Assistant Secretary designated by the Secretary to head the RPS Composite Team (created under DC2017-12-0015 §19 Rule 5). **Composition:** Full RPS Composite Team + representatives of the Market Operator and TransCo (joining upon effectivity of this Circular). **Technical Working Group (TWG):** Assists GEAC in evaluating bid documents; composed of representatives from Legal Services, Financial Services, EPIMB (Electric Power Industry Management Bureau), REMB (Renewable Energy Management Bureau) Technical Divisions, and other relevant entities. DOE Secretary issues Special Order specifying GEAC and TWG members and duties. --- ## RULE 6 — OTHER PROVISIONS ## SECTION 12. POLICY IMPLEMENTATION DOE, through GEAC, conducts Green Energy Auction annually or as necessary pursuant to Section 6. --- ## SECTION 13. COMPLIANCE WITH CSP POLICY Green Energy Auction (including Opt-In Mechanism) constitutes CSP compliance for DUs. --- ## SECTION 14. PRICE CEILING FOR DU-INITIATED CSP GET of the marginal plant per technology = price ceiling for the power supply agreement of a DU undertaking a separate Competitive Selection Process (CSP) for its RPS compliance. --- ## SECTION 15. COMPLIANCE WITH RPS Volume of RE and RECs supplied under this Circular counts toward Mandated Participants' RPS compliance per DC2017-12-0015. RECs distributed **pro rata** among Mandated Participants based on their payment to the FIT-All. --- ## SECTION 16. ADOPTION OF CERTAIN PROVISIONS IN THE FIT RULES GEA adopts ERC Resolution No. 16 Series of 2010 regulatory framework and FIT administration. GEA pricing governed by Section 8 of this Circular. All entities involved in FIT implementation continue discharging their FIT Rules responsibilities with respect to each auction round. --- ## SECTION 17. RESPONSIBILITIES OF GOVERNMENT AGENCIES - **17.1 DOE:** Issues Certificate of Award upon submission of performance bond; submits GET set after each auction to ERC. - **17.2 ERC:** Issues FIT Certificate of Compliance (COC-FIT) **within 60 days** of complete filing by Winning Bidder. - **17.3 TransCo:** - 17.3.1 Enters into REPA with Winning Bidders under GEA; - 17.3.2 Includes GEA Capacity and FIT-All status (including payments to Winning Bidders) in FIT-All Petition; and - 17.3.3 Submits reports to DOE and ERC on GEA implementation status and policy recommendations on FIT administration issues. - **17.4 Network Service Providers (Transmission and Distribution):** - 17.4.1 Ensure timely SIS/DIS and connection processing for commercial operations of RE generating units; NGCP submits current SIS process and timeline to DOE **within 30 days** of this Circular; - 17.4.2 Transmission Network Provider reviews, updates, and submits TDP incorporating grid expansion and ancillary services requirements from GEAP; ensures timely ERC capex filing; and - 17.4.3 Distribution Network Provider reviews, updates, and submits DDP incorporating distribution system expansion requirements; ensures timely ERC capex filing. --- ## RULE 7 — FINAL PROVISIONS ## SECTION 18. NON-DIMINUTION OF VESTED RIGHTS --- ## SECTION 19. PROHIBITED ACTS 19.1 **Failure to Deliver:** Failure by Winning Bidder (reasons solely attributable to Winning Bidder) to deliver committed capacity to WESM: - 19.1.1 On the date of commencement of supply per GEA contract; or - 19.1.2 For more than one (1) year from the effective date of the GEA contract. 19.2 **Bid Manipulation and Anti-Competitive Conduct:** - 19.2.1 **Bid suppression** — agreements to refrain from bidding or withdraw bids so a designated winner's bid is accepted; - 19.2.2 **Bid rotation** — agreements to take turns being the Winning Bidder; may allocate approximately equal monetary values or volumes corresponding to company size; - 19.2.3 **Market allocation** — competitors carve up the market and agree not to compete for certain customers or geographic areas; allocate specific customers or customer types to different firms; - 19.2.4 Any other analogous bid manipulation practices; and - 19.2.5 Any other agreement in relation to conduct or participation in the auction which tends to substantially prevent, restrict, or lessen competition. --- ## SECTION 20. PENALTY CLAUSE Persons or juridical entities committing prohibited acts under Section 19 shall be subject to penalties under EPIRA §46. In addition, they shall be prohibited from participating in any future GEA auction or CSP. --- ## SECTION 21. SEPARABILITY CLAUSE --- ## SECTION 22. REPEALING CLAUSE This Circular repeals DC2020-07-0017. All previous issuances, rules and regulations inconsistent with this Circular are hereby repealed, amended, or modified accordingly. --- ## SECTION 23. EFFECTIVITY 15 days after filing with UP Law Center-ONAR and publication in at least two (2) newspapers of general circulation. Signed: 3 November 2021 Secretary Alfonso G. Cusi Department of Energy, Energy Center, Fort Bonifacio, Taguig City, Metro Manila