By Myrna M. Velasco
Instead of rupturing the exclusivity of franchise for power utilities to broaden the deployment of renewable energy (RE) technologies like solar, majority of the local and foreign investors are instead batting for the passage of a Philippine Mini-Grid Law.
Prospective RE project sponsors – including those affiliated with the Renewable Association of the Philippines (REAP) and the Philippine Independent Power Producers Association, Inc. (PIPPA) – have acknowledged though that this proposed legislation is still under conceptualization phase, hence, further collaboration among relevant stakeholders is being pushed.
According to PIPPA Managing Director Anne Estorco-Macias, the propounded mini-grid law is the preferred policy and regulation frame of many investors to attract fresh capital flow in the country’s RE sector.
RE investors are against the push for a non-exclusive franchise that in essence may only be benefitting one player in the industry and may also strain existing regulations of the restructured electricity sector.
Hence, for fairness and transparency, the industry players are batting for a legislation that will then guide all investors equally in the sector.
Even in the international sphere, however, regulation and policy frames for mini-grids have remained a “complex terrain – with various countries taking RE technology deployments adopting diverging mechanisms into incentivizing investments.
A mini-grid – which is also referred to as “micro grid or isolated grid” is an electricity system interconnected with a distribution network and servicing the needs of localized customers. This could also be interwoven with other technologies, such as battery storage systems.
As stipulated by Abu Dhabi-based International Renewable Energy Agency (IRENA), “countries have adopted a range of approaches to the development of mini-grids,” adding that “existing regulations have often been inadequate to de-risk and finance such investments.”
In other countries, among the key considerations in drawing up mini-gird policy toolbox include legal and licensing provisions; financial support; quality standards and eventual grid interconnection.
And on the domain of regulation, concerns are also being addressed on cross-sector linkages; tariff setting and even the enforcement of technical standards.