DOE allows RE developers to secure permits, do study prior to actual start of service contract

The Department of Energy (DOE) has issued revised guidelines governing the application and awarding of renewable energy (RE) service contracts in the Philippines.

In its Department Circular No. 2024-06-0018, issued on June 4, the DOE now allows RE developers to commence permit processing, conduct survey and other feasibility activities before the official 25-year contract terms begins.

The new guidelines will take effect on June 25, 2024.

The revised guidelines was aimed at promoting ease of doing business in the energy sector and to meet the country’s renewable energy targets.

At a virtual press briefing on Friday, DOE Undersecretary Sharon Garin said the “main consideration when we, why was there an overhaul of the whole, the omnibus, is because as of today, the renewable energy industry is not anymore in its infancy stage, unlike when we first issued the omnibus guidelines for applications.”

“Now, we have about 1,300 service contracts on renewable energy and different technologies, whether solar, wind, hydro,” Garin said.

“We have to revise the omnibus guidelines in order for it to choose for us to be able to filter the serious and legitimate companies that are determined to construct their projects and finish their projects on time, on budget… so we have revised some timelines and some procedures,” she added.

Among the salient features of the revised guidelines is the issuance by the DOE of Certificate of Authority (COA) to developers.

The COA grants developers authority to proceed with activities such as permit processing, conducting survey and feasibility studies, which were previously only permitted after contract approval and signing by the Energy Secretary.

The DOE said the validity period of the COA varies by project type, particularly three years for biomass, geothermal, hydropower, ocean and onshore and offshore wind projects; two years for floating solar; and one year for land-based solar projects.

Under the revised guidelines, the DOE may recall the COA if the developer fails to demonstrate reasonable efforts in undertaking the required activities within these prescribed periods.

Additionally, the Energy Department has streamlined the process for duty-free importation incentives.

Developers of certain projects may now receive a Certificate of Registration (COR) upon signing of the contract or proof of financial closing, providing them flexibility in availing of duty-free importation incentives in the project development stage.

Further, the revised guidelines introduce opportunities for new investments within the contract areas, enabling developers to apply for additional RE contracts and potentially enjoy extended contract terms and incentives for capacity-increasing investments.

To facilitate this transition, the Energy Virtual One-Stop Shop (EVOSS) System will undergo enhancements for five months from the effectivity of the new guidelines or starting June 25, 2024.

During this period, the processing of Letters of Intent (LOI) and RE

applications will be temporarily paused, according to the DOE.

However, it said that RE applications submitted before said date will continue to be processed by the DOE-Renewable Energy Management Bureau.

The DOE said the enhancement period will also allow for the updating of de-listed RE contracts, modifications to the EVOSS System, coordination with concerned government agencies such as the Department of Environment and Natural Resources (DENR), Board of Investments (BOI) and local government units (LGUs), and the establishment of a procedure by the DOE-Information Technology and Management Services (DOE-ITMS) for real-time updates of available areas for service or operating contract applications.

“The implementation of these new guidelines marks a significant step towards facilitating faster RE project implementation, fostering innovation and attracting investments across the archipelago,” said Energy Secretary Raphael Lotilla. — RSJ, GMA Integrated News