DOE to issue circular on NGCP audit


At a glance

    The Department of Energy (DOE) will be issuing a circular to outline the audit parameters on the performance of system operator National Grid Corporation of the Philippines (NGCP) as a concessionaire of the country’s power transmission network.

    On the sidelines of the ongoing Philippine Onshore Offshore Wind Energy Storage Summit, Energy Undersecretary Sharon S. Garin said the audit plan has already been discussed with the key executives of NGCP and there was already a "meeting of the minds" on how the proposed exercise shall be undertaken.

    She added that apart from the DOE, other key energy government agencies – primarily the Energy Regulatory Commission (ERC) shall be heavily involved in the audit process.

    The department previously noted that state-run firms Power Sector Assets and Liabilities Management Corporation (PSALM) and National Transmission Corporation (TransCo) will have their respective participation in the audit undertaking which shall be centered on the performance of the transmission firm in keeping with the provisions of its 25-year concession agreement with the government when it comes to the operation of the country’s transmission facilities.

    The energy official emphasized “we are going to issue a Circular for the audit of NGCP, which will be done together with the ERC,” being the regulator of the restructured power industry.

    Garin qualified that on this audit bid, “we’ve already met with NGCP and we’ve informed them that we are going to issue a Circular and they are willing to participate.”

    The energy official explained that a review of the grid operator’s performance will be highly critical as that will have valuable implication on the massive integration of renewables being planned to support the energy transition agenda being pursued by the Marcos administration.

    “We’re going to do an audit on their performance … we need to see if there is a need for government entering,” she said.

    In other energy markets where grid integration of renewables had failed, generated capacity had to suffer from curtailments and that is not necessarily an enticing proposition for investors eyeing to inject capital on host-markets of RE projects.

    In the case of the Philippines, remedies are being sorted on how transmission upgrades and expansions can be fast-tracked, so the country would not end up as the ‘model on how not to do it’ when it comes RE capacities that are not being wheeled into power load centers.

    Efficient performance of the transmission firm-concessionaire and timely implementation of projects are highly warranted, primarily in the colossal RE capacities that are eyed for delivery between 2024-2026 via the projects to be awarded under the DOE-designed green energy auction (GEA) program.