DOE eyes new policy to fast-track grid projects

The Department of Energy (DOE) is proposing a policy that would allow power generation companies in the Philippines to finance and construct transmission infrastructure in a bid to ease bottlenecks that delay energy project rollouts.

In a draft department circular, the DOE said the move targets “systemic constraints” in the national grid that have hindered the timely dispatch of electricity from new generation facilities, particularly renewable energy projects.

“Even with a generation company constructing its own dedicated P2P connection facility, the surrounding transmission grid may still have inadequate capacity or technical constraints [that prevent] the effective and full dispatch of the new generation, rendering the connection futile and thereby delaying the commercial operation and delivery of the committed power project,” the DOE said.

Currently, private generators are limited to building point-to-point (P2P) connection lines that link their power plants directly to substations, but these connections often remain underutilized due to broader grid inadequacies.

The draft circular proposes allowing generation firms to finance, construct, and install “associated transmission projects” — infrastructure that goes beyond individual connections, such as expanded transmission lines, substations, and related equipment.

The policy is designed to close the gap between power generation capacity and grid readiness, especially as the Philippines ramps up efforts to transition to renewable energy.

“Delays in the installation and completion of facilities for the transmission system hinder the alignment of generation and grid development programs, constrain the entry of new capacities, and undermine investor confidence, thereby affecting the reliability, adequacy, affordability, and security of the country’s energy supply,” the DOE stated.

Under the proposal, generation companies would be allowed to recover their actual implementation costs through agreements with the National Grid Corporation of the Philippines (NGCP), which will retain oversight of financing, construction, and eventual turnover of the new facilities.

The DOE emphasized that the proposed policy aims to synchronize transmission development with the rollout of new power projects to ensure the timely delivery of committed capacities.

The draft circular is open for public comment until October 15.