DOE mulls ‘parallel green grid’ for RE projects

LONDON, England – The Department of Energy (DOE) is seriously planning installations for a ‘parallel green grid system’ that will underpin the integration of mammoth renewable energy (RE) facilities, primarily the 50-gigawatt offshore wind (OSW) ramp up which is the dominant technology cast in the updated Philippine Energy Plan.

In an interview on the sidelines of the recently concluded World Nuclear Symposium here, Energy Undersecretary Sharon S. Garin indicated that the planned Smart and Green Grid System (SGGS) will be built either through State financing or via public-private partnership (PPP) deal; or it could also be done with official development assistance (ODA) loans that may be funneled with the help of the National Economic and Development Authority.

The transmission infrastructure expansion projects to be undertaken by the government, she said, will be those that are not covered yet in the Transmission Development Plan (TDP) that had been submitted to the DOE by the National Grid Corporation of the Philippines (NGCP), the concessionaire of the country’s power transmission assets.

Garin expounded “if it has to be done by government – it could be PPP and the funding may be advanced by a private company - so that could either be done with solicited or unsolicited proposals. It could also be loans, like ODA through NEDA; and if the Maharlika fund is available, why not?”

The DOE official added “there are many options; and since renewable energy is very much supported by many of the international financial institutions, there are a lot of interests being sounded off to us.”

She noted that the development paradigm of State-sponsored transmission facilities could be concretized under government-owned National Transmission Corporation (TransCo), but the operation of the facilities will still be turned over to NGCP which will then be compensated with operating fees.

On the recovery of investments for the targeted parallel transmission projects, Garin specified that it can be done either by TransCo or the PPP private firm-partner.

“We make a feasibility study of the government advancing the project and eventually turning it over to NGCP – whether it’s a government-funded or PPP, that’s something that we are currently determining at this point,” the energy official stressed.

Garin further conveyed that “the parallel green grid transmission infrastructure being thought out by government are those that are not included in the project rollout plan of NGCP because they also have their own project timelines and capex (capital expenditure) program, so maybe we can advance for these parallel projects and it will be TransCo that will build the transmission facilities because they are the ones with capability on that.”

She asserted that the scale of investments as well as the technical design of the transmission facilities may be determined depending on the mode of investment arrangement that will eventually be decided by the government.

Garin qualified that while the parallel grid buildout is classified as ‘smart and green grid’ because these are anchored on the immediate need for enhanced and expanded transmission network for massive scale RE installations, all power plants traversed by these facilities could inject their capacities in line with the non-discriminatory access provision of the Electric Power Industry Reform Act.

When asked on NGCP’s take on the parallel grid investment plan, Garin indicated “we had discussions with them, and so far, they are cooperative with us on this.”

She pointed out that the government is just very keen on stepping up warranted investments for expansion, upgrade and overall improvement of the country’s power transmission system because of the influx of RE investments – and grid integration has been a major headache that the project sponsor-firms have been grappling with.