Napocor set to take new role as ‘system operator’

Published December 17, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/12/17/napocor-set-to-take-new-role-as-system-operator/

Under a new policy being pushed by the Department of Energy (DOE), state-run National Power Corporation (NPC or Napocor) will take on a new role as system operator in off-grid areas.

With that mandate, NPC will have to ensure the reliability of power capacity wheeling to load customers – primarily the distribution utilities or the electric cooperatives.

Off-grid areas generally refer to the island-provinces or the geographically separated or far-flung areas that are physically impossible to connect to the main electricity grid of the country.

Currently, the system operator function lies with the distribution utilities (DUs) in these off-grid or island jurisdictions but as assessed by the DOE, that set-up had not been proven reliable and efficient.

State-run NPC’s entry as system operator will be underpinned by a Circular that the energy department will be issuing soon – chiefly to support the government’s push for total electrification of the unserved and underserved domains of the country.

 “We will have Napocor as system operator, because right now, it is with the distribution utilities,” Energy Undersecretary Felix William B. Fuentebella said.

The energy official further qualified “there should be an independent system operator so we are assigning Napocor to do that, but if the ERC (Energy Regulatory Commission) is accrediting more system operators that can operate in the off-grid areas – that will also be allowed in the Circular.”

When NPC already takes on that system operator function, Fuentebella said it shall already cease on its other role as generator of electricity being fed into off-grid customers.

“Napocor should not be part of the generation sector, that’s the requirement, so it should get out from power generation,” Fuentebella stressed.

He emphasized that NPC’s system operation mandate shall be likened to how the National Grid Corporation of the Philippines (NGCP) has been rendering to on-grid customers – that it is not engaged in electricity generation as well as distribution of power to customers.

“If there are a lot of power suppliers and if NPC is part of it, it could be part of an outcome that there are suppliers being favored in the dispatch of capacity, so that should be avoided,” Fuentebella explained.