NGCP urged to speed up approval of power projects

The Department of Energy (DOE) is urging system operator National Grid Corporation of the Philippines (NGCP) to shorten its approval timeline for the system impact study (SIS) on power projects being developed in various parts of the country.

According to Energy Undersecretary Sharon S. Garin, the shortest timeline that SIS for power projects could be delivered is currently at two years. Such lengthy process is a major headache for power developers in meeting committed commercial operations date (COD) for their facilities, said Garin.

SIS refers to an engineering study that evaluates the impact of planned interconnection or integration of a power facility, primarily if the load can be accommodated by the current capacity of the transmission system without compromising the safety and reliability of the grid.

“We’re trying to cut it down,” the energy official noted although she qualified that a workable timeframe is still under discussion with the transmission firm.

She similarly conveyed that for small projects, primarily those in the renewable energy (RE) investment space, there is already proposal to exempt them from SIS and that is now being evaluated both by the DOE and NGCP.

Garin has not given the megawatt-scale of the projects to be excluded from SIS requirement, but other sources privy to the matter indicated that the power facilities being proposed for exemption are those with capacities of 5.0 megawatts and below.

NGCP is currently swamped with applications for SIS, primarily from RE developers, given the massive projects currently pushed by the government to comply with the increased capacity that must be developed in keeping with the Renewable Portfolio Standards (RPS) of the RE Law.

As emphasized by RE investors, the long-drawn-out timeframe of SIS approvals what has been spoiling the party for capital influx in the sector because that alone could eat up roughly two years of their entire development timeframe.

Based on December 31, 2022 data from the DOE, there have been 1,012 projects awarded with renewable energy (RE) service contracts that when completed could yield installed capacity of 5,450MW and overall potential of 80,344MW with the warranted expansions.

On a per technology basis, the projects bestowed with service contracts include 432 hydropower projects; 314 solar farm developments; 145 targeted wind farm installations; 77 projects for biomass facilities; 36 geothermal energy ventures and six projects for ocean energy technology.

All of these projects will be requiring SIS from NGCP before they can advance into the targeted construction phases of the facilities.

The roll of projects does not fully include yet the 11,600MW of RE capacities that the energy department has been preparing for tendering under the second round of the government-underpinned Green Energy Auction (GEA) program to be administered by June this year.

The RE projects to be awarded under GEA-2 will also add up to the installations that will be applying for SIS with the country’s system operator.