DOE Unveils Opening Price for Landmark Waste-to-Energy Auction

The Energy Regulatory Commission (ERC) established an initial price ceiling for its debut biomass waste-to-energy auction, part of a broader push to diversify the nation’s renewable energy mix and address urban waste management challenges. The regulator approved a preliminary Green Energy Auction Reserve price of ₱8.0167 per kilowatt-hour for the upcoming sixth round of the Green Energy Auction program, according to the ERC. GEA-6 round is specifically designed as a “special auction” for waste-to-energy projects. The proposed rate will undergo a series of public stakeholder consultations scheduled for Jab. 30, Feb. 5, and Feb. 6 before a final price is determined. The ERC’s preliminary pricing model assumes an average upfront construction cost of approximately ₱243 million per megawatt. For a 10-megawatt plant, the commission estimates annual operations and maintenance expenses will reach ₱154 million. While fuel costs for these facilities are pegged at zero because they utilize waste as feedstock, the technology is seen as a capital-intensive but reliable addition to the grid. The Department of Energy (DOE) has identified five specific lots for these projects across Metro Manila, the Visayas, and Mindanao. The auction is expected to offer a total of 170 megawatts of capacity, targeting waste feedstock sourced from the country's most densely populated urban centers. Beyond power generation, the government expects the initiative to mitigate long-standing flood control issues by improving municipal solid waste collection and processing. Under the rules of the GEA-6 round, winning developers will enter into partnerships with local government units for a guaranteed supply of feedstock. The bidding process will operate on a “pay-as-bid” basis, and successful projects are slated for completion by 2028. Once operational, these facilities are expected to deliver power to the national grid under 25-year supply contracts. The waste-to-energy round is one of several competitive tenders the DOE has planned for the year. It follows an anticipated auction for offshore wind projects scheduled to begin in the first quarter of 2026. For that separate offshore wind round, the ERC has set a preliminary reserve price of ₱10.3859 per kilowatt-hour, highlighting the varying cost structures across the country’s expanding renewable energy portfolio.