Higher WTE auction price reinforces support for emerging RE technologies

From AB Capital's The Opening Bell: Three Moves

Event

The ERC approved a higher final green energy auction reserve (GEAR) price of P9.30/kWh for the upcoming waste-to-energy (WTE) auction, up 16% from the initially proposed P8.02/kWh. The move follows a similar upward revision for offshore wind earlier this year and gives developers more room to price projects under the government's special green energy auction program covering 230MW of WTE capacity scheduled for delivery between 2028 and 2029.

View

We think the higher reserve price reinforces the ERC's willingness to provide stronger economic support for emerging and higher-cost renewable technologies to ensure project viability and improve auction participation. At the same time, it also raises the likelihood of higher renewable-related pass-through costs over time.

Catalyst

Focus now turns to auction participation, bid pricing, and the pace of future renewable procurements. We would also watch how regulators balance long-term decarbonization goals with rising affordability and political sensitivity around electricity prices.

Action

We view this as supportive for the broader utilities and renewable energy sector, as it signals continued regulatory backing for project returns and cost recovery mechanisms needed to accelerate RE investments despite near-term tariff concerns.

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