DOE eyes hybrid systems for off-grid areas

MANILA, Philippines — The Department of Energy (DOE) is set to introduce hybrid systems to more off-grid areas of the country to help lower their power rates.

“For the medium to long term, there are, of course, reforms that are needed, including the introduction of hybrid systems because the renewable energy systems, once they complement the diesel since they do not require additional fuel costs, they will help bring down the price of power,” Energy Secretary Raphael Lotilla said.

Lotilla said the country has been faced with the challenge of the sharp increases in the price of diesel since the Russia-Ukraine war broke out last year.

“This has been a formidable challenge in terms of being able to keep up with the enormous increases in the supply of fuel,” he said.

The country’s off-grid islands are powered mostly by diesel plants through state-run National Power Corp. (Napocor), which is mandated to provide power generation and its associated power delivery systems in areas that are not connected to the transmission system.

Napocor Small Power Utilities Group (SPUG) is supplying 229 missionary areas throughout the country, most of which have yet to attain a 24-hour electric power service.

It operates more than 270 SPUG plants, majority of which are in Luzon.

In 2019, Napocor completed its pilot solar photovoltaic-diesel hybrid project in Limasawa Island, Southern Leyte, which was synced to the Limasawa diesel power plant in February 2020.

Since the hybrid system began operating, Napocor said there had been a reduction of the cost of electricity by an average of P0.97 per kilowatt-hour and recorded fuel savings of about 31,000 liters of diesel.

Napocor earlier expressed plans to put more solar hybrid facilities in its SPUG plants located in far-flung villages and islands in the country.

Napocor said it also intends to work with the private sector to expedite the deployment of renewable energy in its service areas as part of the government’s push toward sustainability.

Lotilla, however, admitted the introduction of more hybrid systems in off-grid areas would not happen overnight.

“We will have to ask the cooperation of everyone, including our consumers in the different missionary areas of the country,” he said.

“But we can assure you that the government is doing its best,” the energy chief added.

At present, Lotilla said the Department of Finance and the Department of Budget and Management are working with the DOE to provide the necessary bridge financing that would allow the agency to continue with its services to the off-grid areas.

The DOE had previously pushed for Napocor to have access to credit lines of banks as it pursues its mission of bringing light to far-flung islands and communities in the country.

In September last year, Napocor secured a favorable opinion from the Department of Justice in allowing it access to credit lines of banks to support its operations.

The favorable opinion is expected to allow Napocor to establish a credit line with local banks that would enable it to manage the fuel price increase that has significantly affected its financial position.

It is also expected to enable the state-run corporation to ramp up renewable energy sources in the off-grid areas and improve island-wide transmission in the major off-grid islands, particularly through public-private partnership arrangements.