The Department of Energy (DOE) is proposing a new policy that would allow power generation companies to finance and build transmission infrastructure to help speed up the completion and delivery of power projects across the country.

The DOE said the proposal stems from recurring “systemic constraints” in the national transmission grid that continue to delay new generation projects, especially those from renewable energy developers. The department noted that despite private companies’ efforts to construct their own dedicated point-to-point (P2P) connection facilities, many still remain unable to fully dispatch power due to limited grid capacity.

“Even with a generation company constructing its own dedicated P2P connection facility, the surrounding transmission grid may still have inadequate capacity or technical constraints, rendering the connection futile and thereby delaying the commercial operation and delivery of the committed power project,” the DOE said.

It added that delays in implementing the Transmission Development Plan and the overall inadequacy of transmission infrastructure have restricted the entry of new capacities. These bottlenecks, the department warned, “undermine investor confidence and affect the reliability, adequacy, affordability, and security of the country’s energy supply.”

To address these issues, the DOE is drafting a department circular that would allow power generators to finance, construct, and install new or expanded transmission lines, substations, and related facilities that go beyond their P2P connections, as BusinessWorld reports. These “associated transmission projects” would help bridge the gap between generation growth and grid readiness.

Generation companies implementing such projects would be permitted to recover their actual costs under agreements with the transmission network provider, currently the National Grid Corporation of the Philippines (NGCP). The NGCP would still oversee project implementation, financing arrangements, and eventual turnover of the facilities.

The DOE said this policy aims to better align transmission development with the construction of new generation projects and ensure the timely delivery of committed capacities. The draft circular is currently open for public comment until October 15.

How can the Philippines balance private participation in grid development while ensuring fair access, oversight, and long-term reliability of the transmission system?

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