Few takers yet for green energy drive in Philippines due to crucial transition project delays

The National Grid Corp. of the Philippines has been in hot water since transmission issues triggered widespread blackouts in the power-hungry Luzon grid on May 8.

Meg J. Adonis

Meg J. Adonis

Philippine Daily Inquirer


July 26, 2023

MANILA, Philippines — Private sector interest in the national government’s renewable energy auction program is “dwindling” as a result of delays in crucial transmission projects under the auspices of the National Grid Corp. of the Philippines (NGCP), according to the Department of Energy (DOE).

Echoing President Ferdinand Marcos Jr.’s sentiment during his second State of the Nation Address (Sona) on Monday, Energy Secretary Raphael Lotilla blamed the slow progress of 68 grid connection projects under NGCP for the low investor turnout for the DOE’s second Green Energy Auction Program in June.

Private sector players, he said, remained wary of the condition of the country’s transmission lines.

The DOE had auctioned off 11,600 megawatts (MW) of renewable energy capacities that must be available in the next three years, but the private sector only committed to providing a third of this, or 3,580.76 MW, as the rates approved by the Energy Regulatory Commission (ERC) were “too low.”

“The President has been patient, and he has waited one year until he made a public statement on this,” Lotilla said, referring to the delayed transmission projects, of which 37 had been issued show-cause orders.

Performance audit

Marcos urged NGCP during his Sona to speed up the completion of the projects and reiterated that the DOE, together with the ERC and the National Transmission Corp., was set to review the 14-year performance of the country’s lone grid operator.

Lotilla remained mum on the possible outcomes of the NGCP performance audit but said it was ultimately aimed at identifying recurring problems and finding solutions.

NGCP, which won the competitive bidding in 2009 to manage and operate the country’s transmission grid, has been in hot water since transmission issues triggered widespread blackouts in the power-hungry Luzon grid on May 8.

The company had reasoned that right-of-way issues and long permitting processes hindered the timely completion of transmission projects that could have prevented the power interruptions.

In response to the DOE’s goal of increasing the share of renewable energy in the country’s energy mix from the current 22 percent to 35 percent by 2030 and 50 percent by 2040, NGCP called on the national government to revisit existing policies to accelerate the entry of clean energy technologies.

According to the DOE, it has awarded 126 renewable energy contracts from July 2022 to June this year, with a total potential capacity of 31,131.74 MW.

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