Outages expose need for reforms

Outages expose need for reforms | Daily Tribune

While the Middle East war has brought renewed attention to power security, Navarro emphasized that many of the challenges the Philippines faces are structural and persist even without these external shocks.

Speaking at a PIDS webinar on 14 May, Navarro noted that the power transmission sector is unable to keep up with demand due to a mix of structural, regulatory and institutional challenges.

To highlight the supply problem, Navarro, citing data from her recent study “The Need for Power Transmission Sector Reforms in the Philippines,” pointed out that while electricity consumption grew by about 140 percent from 2003 to 2024, transmission lines increased by only 11 percent.

This situation has contributed to the current congestion, reliability concerns, and energy insecurity.

One of the most pressing issues the power transmission sector faces is persistent project delays, the economist said.

Reportedly, the National Grid Corporation of the Philippines (NGCP), the privately owned company that operates, maintains and develops the country’s electrical power transmission grid, has completed only 75 of 258 planned transmission projects to date.

These delays stem from weaknesses in the Energy Regulatory Commission’s (ERC) regulation, right-of-way constraints, and weak inter-agency coordination, which together affect the system’s ability to keep pace with consumer needs.

Slew of problems

Other notable issues besetting the industry include grid reliability woes; ownership and national security concerns because of Chinese foreign equity participation in NGCP; severe technical constraints in transmission; inadequate transmission capacity and growing congestion; insufficient contracting for ancillary services; and absence of transmission connection in some renewable energy zones.

One of the key hurdles is underinvestment, Navarro continued.

“This underinvestment in transmission contributed to the ongoing energy insecurity in the Philippines. The problems due to underinvestment were compounded by other concerns such as inadequate ancillary services, which made the power system unreliable, especially during peak hours in the summer months.”

She called for further policy discussions on the problems in the power transmission sector and sought reforms to strengthen regulatory capacity and credibility, improve coordination, align investment incentives with public-interest objectives, and enhance the reliability and resilience of the Philippine power transmission system.

Navarro urged policymakers to ensure the timely delivery of projects and impose accountability for delays. This can be carried out by strengthening current mechanisms that show misaligned regulatory incentives, institutional roles, and long-term goals.

There should be greater attention given to governance and ownership issues to address national security concerns in the management of critical infrastructure.