The Department of Energy (DoE) has scrapped its 2026 coal bidding round, including the offer covering Semirara Island, as it moves to rewrite the rules for awarding the country’s coal resources and secure a better economic return for the government.

In a 15 September advisory, the DoE terminated the bid round covering three pre-determined areas offered for development and production coal operating contracts under the Philippine Conventional Energy Contracting Program (PCECP).

The agency cited concerns raised by stakeholders during pre-submission conferences, as well as developments affecting Semirara Island, including continuing water seepage and legal considerations.

Reassessment of evaluation criteria

These issues, the DoE said, warrant a reassessment of the evaluation criteria used in awarding coal operating contracts. The termination effectively sends the DoE back to the drawing board.

The agency said it will use the reset to develop a “fair, equitable, transparent, and comprehensive” framework for awarding contracts covering areas with confirmed or established coal reserves.

The new framework will also seek to ensure “appropriate and measurable economic returns and benefits commensurate with the value and characteristics of the offered area,” according to the advisory.

Biggest coal mine

At the center of the reset is Semirara, the country’s biggest coal mine and a major source of domestic supply. DoE records have historically identified Semirara Mining and Power Corp. as the country’s largest coal producer.

Energy Secretary Sharon Garin said at a press conference earlier this week that Semirara alone supplies about 10 percent of the country’s total coal requirement.

“The most important part of that is the bidding of Semirara. I think everybody knows that it’s up for bidding,” Garin said.

Semirara is being put back on the auction block after its 50-year term, with Garin saying another 50-year award cannot simply be handed to the same entity.

Up for rebidding

“Now, this is up for bidding because it is already 50 years old and according to our constitution, you cannot award that to the same entity so you have to rebid that,” she said.

For the DoE, the next contract is not just about keeping Semirara producing. The government also wants to squeeze more value out of one of the country’s biggest indigenous energy resources.

“If we bid it to the right company, whether it’s an existing or a new company, it will continue the 10% supply. But what we are trying to push is that we — the country gets more out of it,” Garin said.

The DoE is likewise pushing to keep more locally produced coal in the domestic market as the Philippines seeks to limit its exposure to disruptions in overseas energy supply.

“We want to make sure that the coal is being sold in the Philippines, that maximizes — optimization of our resources for energy security. Learning from our experience with the Middle East conflict, kailangan talaga we secure our resources,” Garin said.

The DoE is now finalizing a department circular that will set the terms and procedures for the new contracting process. The PCECP is the government’s framework for competitively awarding coal operating contracts.

“We are finalizing the department circular. The department circular will determine all the terms and the procedure that we will embark on,” Garin said.

The department has already completed its first public consultation and is conducting another round before issuing the final version.

“We have already finished the first public consultation, and we’re doing another public consultation this week, and then eventually, I think in a few days, then we’ll issue the final version,” Garin said.

Rebidding to proceed within the year

Despite terminating the existing round, Garin said the DoE wants the rebidding to proceed within the year.

“We are still far but the bidding will happen within the year,” she said.

“But hopefully we can finish this and wrap it up so that we can make sure that we have coal in the country, and the coal that we have stays in the country. We want to finish this within the year,” Garin added.