In a groundbreaking move to transform energy access in some of the Philippines’ most isolated regions, the National Power Corporation (NPC) is spearheading a first-of-its-kind initiative to hybridize its diesel power plants with renewable energy (RE) sources. Targeting the Small Power Utilities Group (SPUG) areas—Batanes, Bicol, Palawan, and Tawi-Tawi—the state firm has opened bidding to local and foreign renewable energy companies.
The project presents a potential reduction in electricity costs for communities long burdened by the inefficiencies of diesel generation. NPC’s innovative approach invites bidders to finance, design, construct, operate, and maintain their own RE facilities, supplying energy to these remote areas for 20 years. This replaces aging diesel gensets with cleaner, more affordable power—a lifeline for missionary regions where energy poverty has been a persistent challenge.
NPC has allocated a total budget of PHP 3.42 billion for the hybridization effort, with bids due by March 20, 2025. Each area has a tailored financial ceiling: PHP 900 million for Batanes (at a subsidized approved generation rate, or SAGR, of P7.39 per kilowatt-hour), PHP 820 million for Bicol (P6.5520/kWh), PHP 960 million for Palawan (P7.39/kWh), and PHP 740 million for Tawi-Tawi (P6.7072/kWh). NPC has made it clear that offers exceeding the approved budget or tariff rates will be rejected outright.
NPC will evaluate proposals using a “quality-cost” framework in a bid to guarantee that the winning firms can deliver reliable, long-term energy solutions suited to each area’s unique needs.
NPC claims that this project is a “first of its kind for missionary areas” designed to bridge the energy gap between the Philippines’ urban centers and its far-flung islands.
Will this hybridization spark a renewable revolution in the Philippines’ remote corners? What possible hurdles do you think are yet to be addressed? Share your thoughts!
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