Senate trains sights on rural electrification

The Senate is pursuing a law to support the development of microgrid systems, an initiative of the National Electrification Administration (NEA) to fasttrack rural electrification as President Duterte wants government to provide electricity to every household nationwide.

The country currently has no laws to promote microgrid developments, said Sen. Sherwin Gatchalian, who chairs the committee on energy.

He said a law must be passed to harmonize the development of microgrids with the existing franchise of electric cooperatives (ECs).

“We need to come up with a law because there is encroachment of the franchise. We have to make sure that the law, especially the franchise, are in harmony,” he said.

A microgrid system is a group of interconnected loads and distributed energy resources with clearly defined boundaries which act as a single controllable grid and can connect and disconnect from the national grid to enable it to operate in both gridconnected or island mode.

The system can service farflung areas in a franchise area without electricity service yet, Gatchalian said.

“What we will do is allow proponents to put up microgrids. These microgrids will be self-sustaining, they will be distributing and producing [electricity]. There are a number of proponents interested. It’s economical, it promotes competition because in this case, electricity service will not be monopolize by and EC but we will now open up certain missionary areas,” he said.

The lawmaker said NEA has already submitted its proposed policy for microgrids and the committee is now undertaking a review on the proposal.

Earlier, NEA administrator Edgardo Masongsong said the proposed policy would speed up the implementation of rural electrification to maximize microgrid and solar home systems, as well as access to sustainable energy program.

The agency targets to energize 100 percent of rural households nationwide by 2022, which will be met through the development of mini-grids.

This means NEA would need an estimated yearly budget of P4.8 to P5.2 billion to meet its target in five years.

For next year, the agency is asking for a P4.9-billion budget, bulk of which would be allocated to fund capital expenditure requirements of the ECs’ and other power distribution projects.

However, allowing the private sector to develop microgrid systems in areas unserviced by ECs will generate savings and remove the burden and risk from government in line with achieving the rural electrification goals, Gatchalian said.

“This is good because this is at no cost to government. If private sector will come in, run the microgrid and they will distribute, they will bear the risks. And they will still be regulated by the ERC (Energy Regulatory Commission),” he said.

Earlier this year, the ERC has issued draft rules for the licensing of microgrids with the emergence of new technologies such as variable renewable energy resources and to facilitate the entry of distributed energy resources into the transmission and distribution systems.