The Department of Energy (DOE) is poised to launch the third Competitive Selection Process (CSP) for Microgrid System Providers (MGSPs) by June 2025, targeting 71 lots across 167 unserved and underserved areas. This initiative marks a significant stride toward total electrification, bolstered by enhanced policies and investor-friendly reforms.

The DOE’s revised Implementing Rules and Regulations (IRR) effective May 13, 2025 streamlines the CSP process for the Microgrid Systems Act (Republic Act No. 11646). 

According to the DOE, these changes clarify microgrid service contract provisions, delineate stakeholder responsibilities, and introduce enhanced incentives. Notably, awarded projects will automatically qualify as Energy Projects of National Significance (EPNS), expediting permits and licenses. The Notice of Award will also include a Renewable Energy Service Contract (RESC) for renewable energy components, pending proof of possessory rights over service areas.

“This 3rd Round of MGSP-CSP marks a pivotal step in our push for total electrification,” said Undersecretary Rowena Cristina L. Guevara. “By streamlining regulatory procedures, introducing policy innovations, and strengthening coordination across government and the private sector, we are sending a clear signal: the Philippines is ready and open for sustainable microgrid investments.”

The DOE has collaborated with distribution utilities and agencies like the Department of Environment and Natural Resources, Department of Transportation, Department of Tourism, and local government units to assess energy demand and potential in targeted areas. 

To attract investors, the DOE introduced flexible contractual terms and exemptions from certain financial obligations under Energy Regulations No. 1-94 and the RESC, reducing financial risks for proponents. These terms will be formalized in the Microgrid System Provider Service Contract with the National Power Corporation.

This auction builds on lessons from two prior MGSP-CSP rounds, aiming to create a transparent and efficient environment for private investment. The DOE’s efforts underscore a commitment to delivering clean, reliable, and affordable energy to remote communities, aligning with the national goal of energy access as a fundamental right.

How can these regulatory reforms and incentives accelerate microgrid investments to empower the Philippines’ remote communities? Share your insights on sustainable energy solutions.

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