The Department of Energy (DoE) is still working to secure agreements with microgrid system providers (MGSP) for over 200 areas to complement the full electrification bid by 2028.

To accelerate development, Energy Undersecretary Rowena Cristina Guevara emphasized that the DoE is closely collaborating with financial institutions to streamline financing deals and attract more investors — a crucial step in advancing the plan.

“Unfortunately, in the Philippines, our electrification rate is around 92 to 93 percent only. In Mindanao, it’s above 70 percent only. So there’s a lot of work for us to do. There are over 200 microgrids that need microgrid system developers,” Guevara said during the recent MGSP forum.

Uncertainties prevail

“It is no secret that financing projects in these areas come with its own set of uncertainties, may it be geographical, technical, or financial. However, it is precisely why we are here — to address these challenges collaboratively and constructively,” she added.

The Microgrid Systems Act of 2022 requires a Competitive Selection Process (CSP) for MGSPs before they can operate in off-grid areas. The law specifies a 90-day timeline for completing the CSP, from pre-qualification to submitting the awarded contract to the Energy Regulatory Commission.

In the first round of the MGSP Competitive Selection Process, the DoE awarded eight lots to the Maharika Consortium. These lots cover areas in Carnaza and Gibitngil in Cebu, Carlagan and Bongliw in Quezon, and Bacau, San Juan, Calasag, and Katep in Palawan.

Whole-day electricity service

The consortium is set to provide 24-hour electricity service to 3,106 households across all the awarded areas.

Microgrids are small, self-sufficient energy systems that can function independently or in tandem with the main power grid.

They utilize various energy sources, such as solar, wind, and diesel, to provide reliable electricity, particularly in remote or underserved areas. In the Philippines, microgrids are key to expanding electrification where traditional grid access is limited.

Citing a DoE study based on data from the Philippine Statistical Authority, the Department of Health and the Department of Energy, covering 2010 to 2018, Guevara noted that full electrification across the country would require an estimated P100 billion.

Of this amount, P75 billion would be allocated to the National Electrification Administration and electric cooperatives, while P25 billion would go to the National Power Corporation.

The study also revealed that increasing access to electricity by just eight hours could boost income and expenditure by 17 percent. Extending access to 16 hours could result in a 33 percent increase, and providing 24-hour electricity could lead to a 50 percent increase.

“When we computed the total contribution to the economy of such an increase, the number we came up with was 314 billion pesos per year or 1.8 percent of our GDP. Where can you find an investment of 100 billion that produces over 300 billion? Only in the electrification of the country,” Guevara said.