Off-grid lines using hybrid fuel sources

Off-grid lines using hybrid fuel sources | Daily Tribune

To hasten the establishment of renewable energy (RE) sources in off-grid areas, the National Power Corp. (NPC) is set to launch the bidding for the Accelerated Hybridization Program (AHP) by the second quarter.

NPC president and chief executive officer Fernando Martin Roxas said in an interview with reporters last week that a review of the planned bidding is significantly progressing, which makes an auction possible by May or June.

“We will start with four clusters to be a test case structure. The ones we are bidding on are Tawi-Tawi, Batanes, Bicol, and El Nido. So, that’s about four out of the 23 clusters of SPUG (Small Power Utilities Group) power plants. If this will be successful, we will think about applying it to the rest of the power plants,” Roxas said.

According to Roxas, the bidding will be under a 20-year contract wherein NPC will be the off-taker and pay for the energy delivered to its switchyard, including losses.

Boost for private capital

The AHP will enable the private sector to establish renewable energy generation plants to support, enhance, or substitute capacities in the operation of NPC’s SPUG diesel power plants, which are mainly situated in off-grid areas.

It will also decrease the universal charge for missionary electrification subsidies, reduce the reliance on diesel fuel and its associated costs, and establish a mechanism to meet the standards for renewable energy portfolios in off-grid areas.

“It is technologically agnostic, as long as it’s RE. We will pay them the SAGR (subsidized approved generation rate). If the SAGR goes up, we will pay 50 percent each. If it increases by 50 centavos, bidders will pay 25 centavos and the other 25 centavos will be shouldered by NPC,” Roxas explained.

“However, if it goes down, we will not pay them below what they bid. They have an upside but no downside as the floor price is what they bid,” he said.

The NPC targets to fully power up all 278 SPUG plants it supervises with RE between 2028 and 2030.