DOE revokes 84 non-compliant RE contracts

The Department of Energy (DOE) is cracking down on undelivered and non-compliant renewable energy (RE) service contracts as it enforces its regulatory mandate.

In a statement issued Wednesday, the DOE said the total number of revoked RE service contracts this year has reached 84.

The Energy Department said terminated RE contracts could account for an estimated 5,372.209 megawatts (MW) of potential capacity “that had been factored into the country’s energy planning assumptions.”

The agency is monitoring the delivery and compliance of RE developers who bagged contracts under its Green Energy Auction Program (GEAP).

With this, the DOE said it is acting decisively against those that failed to meet their contractual obligations, including non-compliance with work program requirements, failure to satisfy the GEAP Terms of Reference, and non-adherence to established standards. 

“Renewable energy development must be fast, but it must also be accountable. The DOE will not compromise on contract discipline. Service contracts are performance commitments, and renewable energy projects must deliver real, reliable power for Filipino consumers,” said Energy Secretary Sharon Garin.

The Energy Department said its actions follow a comprehensive technical and legal evaluation of the affected projects’ compliance with the material terms and conditions of their respective service contracts. 

The DOE, moreover, said it will continue to uphold high standards for the succeeding GEAP rounds and may impose further sanctions, including blacklisting, forfeiture of performance bonds, and the imposition of applicable penalties.

The agency said it is revisiting supply-demand scenarios and undertaking further system planning to determine appropriate next steps toward meeting established generation targets.

As the department continues its enforcement review, the DOE said it has identified 42 other RE projects that may be subject to termination.

The DOE noted that its enforcement activity was in line with upholding accountability and integrity of the country’s RE development pipeline. 

The Energy Department said contract termination ensures that service contracts are awarded to capable, committed developers with the readiness and capacity to deliver.

The DOE is targeting to bring RE’s share to the country’s power mix to 35% by 2030 and by 50% come 2040. — RSJ, GMA Integrated News