Transmission development soon opened to gencos

MANILA, Philippines — The Department of Energy may soon allow generation companies (gencos) to build associated transmission facilities to ensure the timely delivery of their power projects.

The DOE is proposing a policy that would enable gencos with ongoing or upcoming projects to finance and construct transmission assets required for grid connection in a bid to prevent implementation delays.

Delays in the transmission development plan and the inadequate transmission system have slowed down the commercial operation of committed projects, particularly renewables, the DOE said in a draft circular issued over the weekend.

With this policy, the DOE aims to support the effective grid integration of new generation projects, especially those vital to energy transition and security, and address systemic constraints.

Under the Electric Power Industry Reform Act, a genco may develop, own or operate dedicated point-to-point (P2P) limited transmission facilities, provided that such assets are required only for the purpose of connecting to the transmission system.

But even if a genco builds its own P2P connection, the surrounding transmission grid may still lack the capacity or have technical constraints that could limit the full dispatch of new generation.

This makes the connection “futile” and delays the committed project’s commercial operation and power delivery, the DOE said.

“It is imperative to allow (gencos) not only to construct their P2P connections but also to finance and construct the associated transmission projects or upgrades to the main grid that are necessary to accommodate their new capacity,” it said.

Associated transmission projects, as defined by the DOE, are new or expanded transmission lines, substations or other facilities beyond a genco’s dedicated P2P connection.

Under the proposal, the DOE, together with the Energy Regulatory Commission (ERC) and National Transmission Corp. (TransCo), will speed up the approval of P2P facilities and associated transmission projects. Such facilities will also be certified as energy projects of national significance.

“Any transmission projects completed… and reclassified for competitive purposes shall be turned over and be acquired directly by TransCo or through its successor-in-interest, subject to just compensation as approved by the ERC,” the draft circular stated.

For this proposed policy, all concerned parties may submit their comments and suggestions until Oct. 15, a week before the scheduled virtual public consultation.