The Energy Regulatory Commission granted a provisional authority to National Grid Corporation of the Philippines to implement the P52-billion Visayas-Mindanao Interconnection Project.
“The provisional approval granted to NGCP to implement the Visayas-Mindanao Interconnection Project will enable power supply importations among the Luzon, Visayas, and Mindanao grids,” ERC officer-in charge Alfredo Non said.
“For instance, the deficiency of supply in Visayas may be supplied by importing power from Luzon or Mindanao. Hence, this Visayas-Mindanao Interconnection will help address the insufficient power supply and will also help optimize the available power supply in the Philippine Grid,” Non said.
NGCP is a privately owned company in charge of operating, maintaining and developing the country’s power grid, led by majority shareholders Henry Sy Jr. and Robert Coyiuto Jr.
State-run National Transmission Corp., which owns the transmission assets of the government, however, said it would file a motion asking the ERC to reconsider its decision. TransCo wants to construct the Visayas-Mindanao project by itself, using the Malampaya funds to ease the burden of consumers by not passing on the construction costs.
ERC said it gave the approval, subject to certain conditions. The project shall be subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period.
NGCP is also required to conduct competitive bidding for the purchase of major materials in the implementation of the project and pay the permit fee.
The project involves the interconnection of Visayas and Mindanao via Cebu and Zamboanga. Converter stations in Visayas and Mindanao will be located in Sibonga, Cebu and Aurora, Zamboanga del Sur, respectively.
The project is estimated to be completed in 46 months with an estimated cost of P51.697 billion.
The ERC said the Visayas-Mindanao interconnection project would support the government’s vision to interconnect the major grids into a single national grid which would help improve the overall power supply security in the country.
The project also aims to reinforce the operation of the electricity market by maximizing the use of available energy resources and additional generation capacities in the Visayas and Mindanao which include the renewable energy resources.
NGCP applied for approval of the project in April that would allow power-sharing between Visayas and Mindanao once the project was completed.
NGCP, the operator of the country’s transmission highway earlier commissioned hydrographic survey in September to November 2016. The survey results determined the most viable route beginning in Cebu and terminating in Dipolog.
NGCP said the ERC filing came “after years of research and careful planning.”
“Finding the safest and most viable route for the project was a long and tedious process, given the many challenges that faced us, like unexploded ordinances, fault lines, and submarine volcanic activity. We needed to be careful and sure, as this is going to be the biggest project in the history of the Philippine power industry,” NGCP said.
“As soon as ERC grants us the provisional authority, NGCP will immediately put into motion plans that will lead to the eventual unification of the country’s three main grids. Barring any delays, we hope to get this done by 2020,” it said.