Following a major investment by the Maharlika Investment Corporation (MIC) in the National Grid Corporation of the Philippines (NGCP), the Department of Energy (DOE) announced that this partnership aims to resolve ongoing delays in transmission and interconnection projects that have long plagued the power sector.

In a statement on Monday, Jan. 27, Energy Secretary Raphael P.M. Lotilla expressed support for this decision, emphasizing that it would enhance power security in terms of supply, reliability, affordability, and competition, as projects would benefit from Maharlika’s funding.

“Transmission lines are vital to the power sector. New generation projects rely on transmission wires to deliver electricity to customers. The NGCP, as the country’s single biggest monopoly in the power sector, is responsible for the construction of those high-voltage wires and facilities, and the operation of the national grid system,” the DOE stated.

“The NGCP’s Transmission Development Plan (TDP) indicates when transmission wires and substations will become operational and where. If these transmission facilities are delayed or their completion dates continue to shift, new generation plants will also be delayed, or they may be left stranded or unused even if ready to operate.”

According to the Philippine Development Plan (PDP) 2023-2028, the government is instructed to revisit and reevaluate financing investments in transmission, as this could lead to benefits such as accessible low-cost generation and counterbalancing market power, which would be favorable to consumers.

MIC’s investment is also viewed as a solution to repeated delays in transmission developments, with 98 percent of NGCP’s projects from 2016 to 2024 falling behind schedule.

Slow progress on projects has led to a series of blackouts across the country. Energy Secretary Lotilla cited instances in the Visayas region, noting, “In April 2023, Panay experienced an island-wide blackout, and the NGCP gave assurance that this would not happen again because of the imminent completion of both the Mindanao-Visayas Interconnection Project and the Cebu-Negros-Panay 3 Project before the end of 2023.”

“However, in January 2024, another island-wide blackout occurred in Panay as both the abovementioned projects remained unfinished.”

With MIC’s backing, power costs may potentially decline, as the Independent Electricity Market Operator of the Philippines (IEMOP) indicated that four transmission projects, once completed, could help reduce power prices.

“For instance, had the Cebu-Negros-Panay 3 Project been completed earlier, electricity rates could have been reduced by PHP 1.27 per kilowatt-hour (kWh) in Cebu, PHP 2.03/kWh in Negros, and PHP 1.74/kWh in Panay,” the DOE explained.

“If the Mindanao-Visayas Interconnection Project, which was delayed for 28 months, had been completed earlier, consumers could have experienced a reduction of PHP 1.99/kWh in Luzon, PHP 1.77/kWh in Visayas, and PHP 1.30/kWh in Mindanao.”

The DOE also noted that if the Mariveles-Hermosa and the Hermosa-San Jose 500 kV transmission line projects were completed, Luzon could see a potential discount of PHP 1.47/kWh, while Bohol consumers could benefit from a PHP 1.24/kWh drop if the Cebu-Bohol 230 kV project becomes operational.

“The government’s investment in transmission is short of the United Kingdom’s (UK) decision to renationalize its transmission system operator last year.”

Last year, the UK renationalized its power system in an effort to dampen electricity prices, support more renewable energy initiatives, and ensure energy security within the country.