The Philippine Competition Commission and Energy Regulatory Commission are strengthening regulatory coordination to promote fair competition and greater efficiency in the Philippines’ growing renewable energy sector.
In a strategic policy dialogue held on March 17, the two agencies discussed the results of a Competition Impact Assessment (CIA) on the Green Energy Auction Program (GEAP), following an earlier consultation with the Department of Energy on January 19. The review examined how current auction mechanisms for renewable energy projects affect market efficiency, investor participation, and electricity prices.
Central to the discussions was the determination of Green Energy Auction Reserve (GEAR) prices, which serve as benchmark rates for auction participants. Regulators addressed concerns that representative plant data must keep pace with changing market realities to sustain investor interest.
The ERC said its pricing framework uses a discounted cash flow model with more than 40 parameters, designed to reflect declining technology costs while safeguarding consumers from excessive charges. ERC Chairperson Francis Saturnino Juan said auction success should be measured not only by competitive prices but also by whether awarded projects are completed and deliver reasonable rates to end-users.
The agencies also reviewed the current per-grid auction system, which some stakeholders say may limit participation due to geographic segmentation. The ERC explained that grid-based auctions remain necessary to maintain system reliability, prevent transmission bottlenecks, and avoid higher capital costs from overconcentration of projects in one area.
Transparency measures were likewise discussed, including the publication of price caps and the conduct of pre-bid conferences. While the PCC study explored whether undisclosed caps could help reduce collusion risks, the ERC emphasized that public participation in rate-setting remains a legal requirement under administrative due process.
The joint review supports the country’s renewable energy targets of 35% share in the power generation mix by 2030 and 50% by 2040, while helping ensure market safeguards that encourage fair competition and sustainable investment.
Under its mandate to champion pro-competition reforms, the PCC Economics Office regularly conducts competition impact assessments to help government agencies evaluate policies and regulations. These efforts form part of the National Competition Policy, a whole-of-government approach aimed at aligning state policies with competition law principles.