NEA launches natural gas-fired power procurement for electric cooperatives

By Sheldeen Joy Talavera – November 14, 2023 | 8:41 pm
from Business World

THE National Electrification Administration (NEA) said it is kicking off the procurement process for power generated by natural gas-fired plants for use by electric cooperatives (ECs).

The use by cooperatives of power generated by gas-fired plants was ordered by the Department of Energy (DoE).

“The NEA shall ensure that the PSAs (power supply agreements) resulting from the conduct of the said CSP (competitive selection process) shall be filed by the individual EC with the winning power supplier/s in the ERC (Energy Regulatory Commission) in accordance with the guidelines by the DoE, ERC, and NEA,” according to a memorandum dated Nov. 13.

The DoE asked the NEA last month to facilitate the joint conduct of a CSP for power generated by indigenous natural gas, which is meant to be a transition fuel for ECs.

The NEA will serve as aggregator for ECs to fill their uncontracted power requirements and contracted power deals expiring within two years.

The NEA will draft the terms of reference and other bidding documents required for the CSP, it said.

In August, the DoE issued a draft circular requiring distribution utilities to procure a certain percentage of their power from natural gas-fired power facilities.

The DoE considers natural gas to be a “suitable transition fuel” that will keep the supply of power stable as the energy grid transitions to renewable energy.