STATE-LED National Power Corp. (Napocor) said it is expediting the bidding process for its accelerated hybridization program to allow private companies to build renewable energy facilities in off-grid areas.
“In essence, a portion of the electricity that Napocor would have produced using its diesel power plant will be replaced with the generated electricity by the RE facility of the REPP (renewable energy power provider) which in turn reduces the cost to Napocor and the government,” Fernando Martin Y. Roxas, Napocor president and chief executive officer, said in a statement over the weekend.
Napocor said it is now finalizing the bidding documents for its hybridization project.
The proposed entry of the private sector will augment and replace the current capacity of the Small Power Utilities Group (SPUG) diesel power plants, it noted.
Under the project, Napocor plans to bid out four clusters of off-grid areas such as Batanes, Palawan, Bicol, and Tawi-Tawi.
“The SPUG diesel power plants are grouped into clusters wherein four clusters will be piloted for procurement. These are clusters in Batanes, Palawan, Bicol, and Tawi-Tawi,” Mr. Roxas said.
The private firms will develop, finance, construct, and operate the renewable energy facility for their chosen clusters, Mr. Roxas said, adding that Napocor will serve as the off-taker of electricity generated from the facility at an agreed contracted price.
According to its website, the project will use the existing subsidized and approved rate of the Energy Regulatory Commission (ERC) as the limit for the bid offer.
“The winning bidder, the Renewable Energy Power Provider (REPP), will be awarded a Renewable Energy Power Purchase Agreement (REPPA) with Napocor,” he said.
The project will use hybridization of technologies, such as diesel and renewable energy, which also aim to reduce the subsidies for the Universal Charge for Missionary Electrification (UCME).
As authorized by Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA), the UCME is collected from on-grid electricity end-users to fund Napocor’s electrification programs and projects, particularly in remote areas not connected to the grid, which must use diesel generators.
Napocor is mandated to provide electricity to all far-flung areas not connected to the main grid through SPUG plants. To date, Napocor operates 281 SPUG plants, mostly powered by diesel, in 190 areas. — Ashley Erika O. Jose
