NGCP seeking higher capex to link RE projects

By Alena Mae S. Flores – July 3, 2023, 7:00 pm
from manilastandard.net

NATIONAL Grid Corp. of the Philippines is seeking the government’s assistance for higher capital expenditures to roll-out transmission facilities for the entry of more renewable energy power plants in line with the target of a 50-percent share in the power mix by 2050.

“We hope for the government and regulator’s support in crafting policies and allowing NGCP to have enough capex to fund the required projects to support RE. This move towards a greener and more sustainable grid requires a holistic approach and we hope for the synergy among all the energy players to ensure the fruition of these efforts,” NGCP said in a statement.

It said the Transmission Development Plan considers variable RE and committed RE plants which will connect to the grid in the next few years.

It said capex-heavy projects would require regulatory approval from the Energy Regulatory Commission.

“The ERC, among all agencies, will be centrally crucial to the success of all this,” it said.

It said the Department of Energy recognized that transmission projects to support their recent off-shore wind projects were not included in NGCP’s 5th regulatory period application with the ERC.

“Access to funding was never a problem for NGCP. External limitations, including regulatory caps on capital expenditures, protracted permitting processes by the local government units, and difficult rights-of-way procurement, have proven to be the primary roadblocks to project completion,” NGCP said.

“If the ERC will allow us to spend the capital expenditures needed to support this laudable push towards green energy, we are very confident that NGCP will be able to deliver,” the company said.

RE development will also take time and efforts must begin now, NGCP said.

“Even first world countries take around 10 years to build transmission backbone projects. NGCP was able to complete the Hermosa-San Jose 500kV Line, including a new substation and 176.73 circuit kilometers of high voltage lines, in seven years,” NGCP said.

“This includes the delay brought about the three-year COVID-19 pandemic lockdowns, and the fact that we were only allowed to recover less than one percent of the project cost. With all things considered, NGCP is sure it can deliver its committed projects to improve the grid, as long as the political will and support are there and we are given a sustainable recovery framework,” the company said.

The company said State Grid Corporation of China, its technical partner, owns world-leading grid technologies as it runs a green and sustainable power grid.

SGCC integrated the largest amount of renewables in the world with installed capacity of 540 gigawatts and utilization rate at 97.4 percent in 2021.

This technological partnership with SGCC gives NGCP an edge in ensuring that the Philippine grid is ready and capable of integrating high levels of variable renewable energy, it said.

“With its access to SGCC’s technology, NGCP is more than capable to accommodate the increasing integration of renewable energy into the grid for a more sustainable energy mix,” the company said.

NGCP said integrating more RE into the Philippine grid would require more from the energy sector including significant transmission backbone expansion.

This will also require reinforcement in both policy and support infrastructure.

It said the entry of more conventional, non-variable generation and energy storage systems to support VRE installations should be planned simultaneously.

Support policies including but not limited to the Philippine Grid Code shouldt be revisited, and prioritization of the development of Competitive Renewable Energy Zones to synchronize generation and transmission projects should be well coordinated, it said.

It said support from other sectors outside the energy industry should also be in full force to accommodate this integration.

NGCP said roads and ports should be ready to accommodate the expected influx of materials needed to build the needed transmission facilities.