National Power Corporation (NAPOCOR) is losing Php 1 billion a month because of the volatile diesel fuel prices, causing the organization to escalate its efforts in hybridizing diesel-fired power plants in off-grid areas.
Napocor President and CEO, Fernando Roxas, highlighted the need for these measures to address the financial challenges caused by the fluctuating prices of diesel fuel.
In a report by the Philippine Daily Inquirer, Roxas said that NAPOCOR has set its diesel rates to recover Php 35 per liter.
Nevertheless, the escalating cost of diesel fuel, which has reached up to Php 70 per liter, has further exacerbated the financial losses incurred by the corporation responsible for managing the small power utilities group (SPUG) power plants in off-grid areas.
Roxas elaborated that the energy company lacks the necessary funds to independently undertake the energy transition. As a result, they are seeking collaboration with the private sector to assist in the hybridization and conversion of diesel-fired plants into renewable energy sources.
To date, NAPOCOR oversees the operation and maintenance of 281 SPUG power plants, primarily fueled by diesel, situated in 189 municipalities throughout the Philippines.
NAPOCOR, faced with the high prices of diesel fuel, has sought financial assistance from the Land Bank of the Philippines (Landbank) totaling Php 15 billion.
While Napocor has already obtained Php 5 billion, Roxas said that the remaining Php 10 billion is still pending Monetary Board approval and requires a sovereign guarantee from Malacañang.
Once the full amount of Php 15 billion is secured, it is estimated that the debt will be paid off within approximately five years, by 2027.
To expedite its transition to renewable energy, NAPOCOR has engaged with 18 companies for potential partnerships. The focus of these collaborations is to initiate the hybridization of existing SPUG plants using biofuels and the establishment of solar power plants.
Notably, 90% of these partnership opportunities involve local companies that are willing to finance NAPOCOR’s hybridization projects, intending to reduce power costs in off-grid areas.
In line with the Department of Energy’s (DOE) directive to shift towards renewable energy, NAPOCOR announced earlier this year that it would cease the importation of diesel generating sets, as part of the effort to transform its existing technologies.