REM FULL COMMERCIAL OPERATIONS LAUNCH
THE AVP
The Renewable Energy Market (REM) officially began full commercial operations on 26 December 2024, following the Department of Energy’s (DOE) issuance of Department Circular No. 2024-12-0031, titled “Declaration of the Full Commercial Operations of the Renewable Energy Market.” Following the same, the Independent Electricity Market Operator of the Philippines (IEMOP) has started carrying out the RE Registrar functions.
The REM is a venue for trading Renewable Energy Certificates (RECs) which are market-based instruments representing renewable and environmental attributes of one (1) MWh of power generation from duly registered eligible Renewable Energy (RE) facilities. The RECs are issued to and traded between Market Participants for them to meet their Renewable Portfolio Standards (RPS) obligations. The RPS refers to the policy established under the Renewable Energy Act of 2008 requiring Mandated Participants to source a portion of their energy supply from renewable energy.
On 10 June 2022, the DOE issued Department Circular (DOE DC) No. 2022-06-0019 declaring the interim commercial operations (I-COP) of the REM, which aims to prepare the market for full commercial operations while awaiting the determination of the REC price cap and its methodology, rules on the cost recovery mechanism of RPS compliance by regulated entities, and the structure and level of REM transaction fees. These regulatory frameworks form part of the readiness criteria to enable the effective implementation of the REM.
Through the Memorandum of Agreement dated 21 June 2023 executed by the Department of Energy (DOE), the Independent Electricity Operator of the Philippines (IEMOP) and the Philippine Electricity Market Corporation (PEMC), the parties agreed on the terms of the transfer of the maintenance and operations of PREMS assets as well as the transfer of the RE Registrar functions from PEMC to IEMOP in further preparation for the launch of full commercial operations of the REM. The physical transfer of the Philippine Renewable Energy Market System (PREMS) infrastructure, including software configuration under the IEMOP network from PEMC to IEMOP Market Operations Center was completed on 5 June 2024. IEMOP and PEMC have since jointly conducted the necessary activities in preparation for the full commercial operations of the REM.
On 23 April 2024, the Energy Regulatory Commission (ERC) published the price cap initially set at PhP 241.56/MWh subject to review every two years or as deemed necessary and the Cost Recovery Mechanism of On-Grid Distribution Utilities in Compliance with the RPS. These regulatory frameworks complete the hard requirements for the REM to go on full commercial operations.
As of 25 December 2024, 90% or 295 of the expected 328 on-grid participants – which include RE Generators and Mandated Participants such as Distribution Utilities, Electric Cooperatives, Retail Electricity Suppliers, and Generators serving Directly Connected Customers – have registered in the REM and have active access to the Philippine Renewable Energy Market System (PREMS).
The REM operations will be facilitated through the PREMS, an enterprise-grade system developed by Exist Software Labs, Inc through the partnership between the DOE and the United Nations Office for Project Services (UNOPS).
Pursuant to the mandate of the Republic Act (RA) No. 9513, or the “Renewable Energy Act of 2008”, the REM is one of the DOE’s RE transition pathway programs focused on accelerating RE development in the country by achieving the aspirational RE target share in the country’s energy mix at 35% by 2030 and 50% by 2040, thereby reducing reliance on imported fossil fuel and bolstering utilization of indigenous renewable energy resources.
The DOE held a ceremonial launch of the REM full commercial operations last 12 December 2024 in Makati City during the inaugural Sustainable Energy Awards presented by the department.
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