The Energy Regulatory Commission (ERC) says that the unification of the Luzon, Visayas, and Mindanao grids will help lower the cost of electricity in the country.
ERC chairperson Monalisa C. Dimalanta said that the integration of the grid will have an influence on power rates rates since the system’s ability to acquire or transfer excess power will stabilize the supply situation in Visayas and Luzon.
“It will [have an] impact [from] the connection of Mindanao to Visayas and Visayas to Luzon, definitely will have an impact on the rate… The ability now of the grid to get the excess power or to export the excess power from Mindanao all the way to Visayas, all the way to Panay, is a unique experience that we are now enjoying because that excess supply, that supply will stabilize the supply situation in Visayas and all the way to Luzon,” said ERC chairperson Monalisa C. Dimalanta.
Dimalanta further explained that additional supply means increased competition, and this would imply lower electricity costs. The ERC chairperson, however, warned that any anti-competitive behavior is set to be penalized by the commission.
“So definitely the connection, because it increases supply, will increase our chances to get to
affordable levels of power prices and definitely increasing renewables will also allow us to access power that doesn’t have a fuel component,” added Dimalanta.
Energy Secretary Raphael Lotilla said in the Post-SONA press conference that off-grid areas are fully dependent on diesel fuel, and the introduction of renewable energy like solar and wind would help reduce fuel costs and have a direct impact on the cost of power.
The ERC chair added that the commission has been conducting a fuel cost audit for generation from fossil fuel plants, as these facilities rely on imported fuel. By reducing dependence on imported fuels, the country could move closer to achieving more affordable power rates.
However, several collateral factors must be considered, such as grid stability. Solar and wind are said to be intermittent resources, so its integration must be balanced with the grid’s voltage and frequency requirements to ensure reliability.
When asked if the unification of the grid could pull in more investors, Sec. Lotilla said that it is important to have policies in place, seeing as the interconnections are already present.
“We’ve got to have a level playing field so that investors, both foreign and domestic, are going to put their money into new generation and the improvement of distribution of electricity in the Philippines,” said Lotilla.
Lotilla added that to date, Luzon has committed almost 2,000 megawatts (MW) of new baseload capacity and another 2,000 variable renewable energy until 2028, and right now, the country is at 4,400.
