P500B needed for Smart Grid Project

How the Philippines became the top wind power generator in the ASEAN

The government will woo foreign and local private investors that will generate around Php 500 billion worth of capital outlay for the Smart Green and Grid System (SGGS), the parallel grid that will support the upcoming investments in offshore wind. 

In a report by the Manila Bulletin, Energy Undersecretary Rowena Cristina Guevara said that the initial buildout of 50 gigawatts (GW) of offshore wind until 2040 would require investments for transmission projects to double the current capacity of the existing power grids. 

Guevara noted that the Php 500 billion would be the investment in transmission projects until 2040 to help meet the 50% renewable energy share target, which will result in a Php 0.58 per kilowatt (kWh) increase in rates. 

The investments will be either done through direct private-sector financing or a public-private partnership, with the concurrence of the National Grid Corporation of the Philippines (NGCP). 

The DOE official noted that the needed grid integration facilities for the offshore wind projects are not included in the Transmission Development Plan (TDP) submitted earlier by the NGCP. 

Under the current setup, some generation companies (GenCos) and power project sponsor firms have been advancing investments for transmission connections. Guevara said that the government plans to institutionalize the mechanism, including the reimbursement of costs being advanced by the firms. 

DOE said that should the transmission facilities be aligned for the initial completion of the offshore wind projects in 2028-2030, the projects must begin next year – primarily on the design phase of the projects. 

The National Transmission Corporation will likely bid out the contracts with interested PPP partners or private investors, while the design will be sorted by the NGCP in order to be harmonized with its requirements, Guevara said.