Palawan off-grid deal filed with ERC

• Source: http://www.bworldonline.com/content.php?title=palawan-off-grid-deal-filed-with-erc&id=109229
• Sunday, June 7, 2015 9:15:00 pm

By Claire-Ann Marie C. Feliciano

SABANG Renewable Energy Corp. (SREC) has sought regulatory approval to provide electricity to an off-grid site in Palawan province. The company asked the Energy Regulatory Commission (ERC) to approve the qualified third party service and subsidy agreement (QTP-SSA) it executed with National Power Corp. (Napocor).

The agreement covers the provision of electricity to Barangay Cabayugan in Puerto Princesa City.

“The current electricity service situation in Barangay Cabayugan is an unregulated and individual system of electrification based on diesel generation,” SREC explained in its application dated May 20.

The company added that there is also no operational power grid in Palawan and while the large hotels run on diesel generators, all other establishments are limited by the availability of power.

Under the QTP-SSA, SREC will provide electricity to around 600 households, 50 small hotels and business establishments, and two mid-sized hotels.

The power will be sourced from a hybrid power facility, which will be composed of a 1.4-megawatt (MW) solar photovoltaic (PV) plant; a 2.3 MW-hour storage batteries; and four 320-kilowatt units of diesel generators.

SREC said the solar farm will involve 5,616 PV panels with a capacity of 250 watt-peak each. Ion batteries will also be used for energy storage.

“In order to guarantee a 24-hour energy supply, the plant also includes four diesel engine generator sets...,” SREC added.

The entire facility will entail a P429.43-million investment that will be funded by a combination of debt and equity. It is expected to be fully operational within this year.

The entry of QTPs in off-grid areas is intended to stimulate economic growth even in unviable areas.

Operations of such power providers are made feasible via a subsidy sourced from the universal charge for missionary electrification (UCME).

“This enables a QTP to operate viably while charging its consumers at rates reasonably acceptable in the area as determined by this commission,” the application read.

The QTP-SSA between SREC and Napocor further provides that the power generator shall charge and collect from its end users the subsidized rate and source the remaining from the UCME subsidy.

“This will greatly spur economic growth in the service area and contribute significantly to the improvement of the lives and livelihoods of the local inhabitants of the island,” the petition stated.

Napocor -- through its Small Power Utilities Group -- is mandated by the Electric Power Industry Reform Act of 2001 to provide electricity to remote barangays and villages or areas not connected to the country’s power grid.

The state-run power firm urges private parties to enter into these areas to provide electricity via bilateral deals.

Areas considered off-grid include Mindoro, Marinduque, Romblon, Masbate, Siquijor, Zamboanga, Sulu and Tawi-Tawi.