Napocor seeks help to speed up SPUG hybridization

MANILA, Philippines — The National Power Corp. (Napocor) is seeking the assistance of the private sector to fast-track efforts to transition the operations of off-grid areas in the country to renewable energy.

Napocor is looking to implement a hybridization project for Napocor-Small Power Utilities Group (SPUG) diesel power plants using renewable energy resources through private sector participation.

“We would like to hybridize, but we could do it faster through the  private sector. We have our own hybridization projects within Napocor, but if it is in Napocor, it is the government that spends. It takes time,” said Pablo Anido, consultant at the office of the Napocor president and CEO.

“So with the help of the private sector, hopefully we can accelerate the process and get more hybridization projects online,” Anido said.

The hybridization project aims to bring down fuel costs incurred by Napocor, as well as reduce the universal charge for missionary electrification or UCME subsidies.

It is also expected to meet the demand of electric cooperatives and distribution utilities during certain hours in a day in Napocor-managed off-grid areas through the production of renewable resources.

The project will involve private sector participation in the off-grid SPUG diesel power plants and island grids where Napocor owns the transmission lines.

However, Napocor said the private sector proponent or renewable energy power provider (REPP) must secure a service contract from the Department of Energy and all other necessary permits.

The REPP will be the one to develop, finance and operate the renewable energy resource.

The renewable energy generation facility to be put up must be located within the electric cooperative or distribution utility facilities or franchise area.

Napocor, on the other hand, will be the off-taker of the entire electricity generated by the REPP through a renewable energy power purchase agreement.

Napocor, as mandated by the Electric Power Industry Reform Act of 2001, is tasked to perform missionary electrification in the farthest communities and islands not connected to the main grid.

It is in this capacity that the corporation operates 281 SPUG plants serving 125 islands across the country.

These off-grid islands are powered mostly by diesel plants through the Napocor-SPUG.

As part of its plan to mitigate the impact of high fuel prices on its operations, Napocor last March announced it would cease acquiring diesel generating sets in line with its push for sustainability through renewable energy.

The move is expected to minimize the losses incurred from rising fuel costs and eventually make its operations more sustainable.

Napocor president and CEO Fernando Martin Roxas earlier said he was targeting to convert all SPUG areas into 100 percent renewable energy operations before 2030.

Roxas expressed their aspiration for a complete transition to 100 percent renewable energy by 2028.