DOE floats CSP exemption for waste-to-energy projects

MANILA, Philippines — After granting auction exemptions to nuclear power facilities, the Department of Energy (DOE) is now looking to extend the same relief to waste-to-energy (WTE) projects.

The DOE is looking to allow pioneer WTE projects to bypass the government-mandated competitive selection process (CSP) when securing power supply agreements (PSAs) with distribution utilities (DUs).

“Any DOE issuance to the contrary notwithstanding, pioneer WTE projects, regardless of capacity, shall be exempt from the conduct of CSP,” the agency said in a draft circular issued over the weekend.

The CSP exemption is a key incentive proposed by the DOE to accelerate the integration of WTE into the country’s power generation mix.

The proposal comes just weeks after the DOE issued a circular exempting pioneer nuclear plants from CSPs, a move critics say compromises Filipinos’ statutory right to least-cost power.

Under existing guidelines, DUs are required to procure power supply through a transparent, competitive and timely conduct of CSPs to ensure electricity is delivered to end-users at the least cost.

The CSP is then awarded to the generation company (genco) that offers the lowest rate, with the resulting PSA submitted to the Energy Regulatory Commission for approval.

With the exemption, however, gencos operating WTE plants could directly negotiate supply deals with DUs without having to compete through a formal bidding.

Aside from waiving CSP rules, the DOE also plans to grant pioneer WTE projects preferential dispatch in the Wholesale Electricity Spot Market, giving them priority over other power generation sources.

“The integration of WTE in the country’s power generation mix represents a strategic approach to addressing the dual challenges of growing energy demand and increasing solid waste generation,” the draft circular stated.

The DOE said WTE facilities are expected to provide a stable baseload supply to the country by converting municipal solid waste, industrial waste and other eligible feedstocks into power.

According to the National Solid Waste Management Commission, Metro Manila and other highly urbanized cities (HUCs) generated around 6.12 million metric tons of solid waste last year.

This waste feedstock, the DOE said, could deliver 335 megawatts of baseload power supply.

Early next year, the DOE intends to conduct a special green energy auction round for WTE projects that will source waste feedstock from Metro Manila and HUCs.