Beginning Thursday, 26 December 2024, the trading of Renewable Energy Certificates (RECs) will officially commence, marking a significant milestone with the full commercial operation of the Renewable Energy Market (REM). These Certificates are market-based instruments representing one (1) megawatt-hour (MWh) of electricity generated from eligible renewable energy facilities, such as solar, wind, hydro, geothermal, and biomass. The REM provides a platform for trading these certificates, enabling participants to meet their renewable energy compliance obligations under the Renewable Portfolio Standards (RPS).

The REM is a cornerstone mechanism under the Renewable Energy Act of 2008, designed to drive the development of renewable power projects and bolster the country’s transition to clean energy. The initiative aligns with the government’s ambitious renewable energy targets of achieving at least 35 percent in the power generation mix by 2030 and 50 percent by 2040.

“The full commercial operation of the REM is pivotal in advancing the country’s clean energy transition,” said Energy Secretary Raphael P.M. Lotilla. “It supports compliance with the RPS, fosters investment in renewable energy, and ensures a robust framework for sustainable energy trading.”

The RPS is a market-based policy requiring Mandated Participants, such as distribution utilities (DUs), to source a portion of their energy supply from eligible renewable energy facilities. In 2023, the annual incremental RPS requirement for grid-connected areas was increased from 1 percent to 2.5 percent. For 2024, renewable energy is projected to supply 11.4 percent of the total power demand, underscoring the critical role of the REM in achieving compliance.

Currently, around 285 participants, including generators, distribution utilities, and end-users, are anticipated to register with the REM. The DOE projects that REC trading will significantly contribute to meeting RPS requirements and stimulate growth in renewable energy capacity.

Secretary Lotilla expressed his appreciation to the Energy Regulatory Commission, the Independent Electricity Market Operator of the Philippines, the Philippine Electricity Market Corporation, and private stakeholders for their collaborative efforts with the DOE in ensuring the readiness and operationalization of the REM. He noted that the trading and usage of RECs are expected to become more frequent as renewable energy demand continues to grow.

The launch of REC trading represents a major step forward in the Philippines’ commitment to energy security, economic growth, and environmental sustainability. With the REM now fully operational, the country is poised to harness the power of renewable energy for a cleaner and greener future. ###