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Manila Bulletin devider Business devider DOE awards contract for electrification of 8 off-grid areas

DOE awards contract for electrification of 8 off-grid areas

Published Apr 3, 2024 07:47 am

At A Glance

  • Following the completion of the award of the first contract for the microgrid systems service provider, the DOE indicated plans to hold the second round of bidding for energization undertaking at other off-grid communities.<br> 

The full energization of at least eight unserved off-grid domains in the provinces of Quezon, Palawan and Cebu will finally take off as the Department of Energy (DOE) has already awarded the contract that shall underpin the project’s implementation and eventual commercial operations.

The microgrid electrification deal, which resulted from the successful outcome of competitive selection process (CSP) in January last year, was clinched by the Maharlika Consortium, an investor-group comprising of the Maharlika Clean Power Holdings, Corp., Singapore-based firms CleanGrid Partners Pte Ltd., and WEnergy Global Pte Ltd.

As framed in the contract, the consortium “will provide 24/7 electricity services to said areas through a hybrid microgrid system composed of solar photovoltaic, energy storage system, and diesel genset.”

It was specified that the timeline of completion shall be at least 18 months from the execution of Microgrid Systems Service Contract (MSC) with state-run National Power Corporation, which has oversight on the off-grid power systems in various parts of the country.

The energy department qualified that the tariffs to be passed on by Maharlika to the consumers within the project-covered areas shall be subject to the approval of the Energy Regulatory Commission.

The contract terms set forth that the energization venture can corner subsidy via the universal charge for missionary electrification (UCME) – and this will be stretched within 20-year duration.

The subsidy charge, in particular, shall represent the component of the cost beyond the regulator-approved rate for the off-grid areas.

Following the completion of the award of the first contract for the microgrid systems service provider, the DOE indicated plans to hold the second round of bidding for energization undertaking at other off-grid communities.

To prepare for the process, the department will continually collaborate with the relevant power utilities as well as with government-run National Electrification Administration (NEA) and NPC for the warranted validation and identification of unserved and underserved sites that will be covered in the next CSP exercises.

“This validation process is essential as these areas may either undergo further assessment for inclusion in the MGSP-CSP or necessitate identifying alternative solutions where microgrid systems may not be viable,” the DOE explained.

It added that “economic and logistical considerations are carefully evaluated to ensure the inclusion of appropriate areas in the CSP and should align with the overarching objective of delivering sustainable and reliable energy solutions to communities in need while optimizing resource allocation.”

The auction system for microgrid energization is anchored on the provisions of Republic Act  11646, or the Microgrid Systems Law – which primarily prescribes the timeline for prequalification of interested investors to bidding; then the contract award as well as tariff approval by the regulator. 
 

Related Tags

Maharlika consortium National Power Corporation Department of Energy (DOE) off-grid electrification microgrid systems act
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