DOE issues Circular on creation of RE zones

Published October 27, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/10/27/doe-issues-circular-on-creation-of-re-zones/

The Department of Energy (DOE) has formally issued a Circular institutionalizing the creation of competitive renewable energy zones (CREZ) in the country as well as guarantee the integration of these on-and-off electricity-generating technologies in the power grid.

Via Department Circular No. 2018-09-0027, the DOE noted that the policy intends to “enhance the planning process and strengthen the implementation of the PEP (Philippine Energy Plan)” – as well as that of the Power Development Plan, Transmission Development Plan and the National Renewable Energy Program.

To concretize such goals, the department prescribes the identification and creation of renewable energy (RE) zones “and upgrade and expand transmission facilities through policy initiatives and activities that shall enable the optimal use of the indigenous RE resources of the country.”

Beyond the administrative support that the Circular has decreed, however, less clear is how the DOE shall be demarcating its targeted RE zones.

The DOE policy is also unsettled on how it shall engineer efficient RE integration given all the other technologies that the system operator shall be catering to in the entire value chain of the country’s electricity network.

The Circular just stated that it will support the National Grid Corporation of the Philippines (NGCP) in planning transmission line enhancements, such as infrastructure upgrades as well as expansions.

The department added it shall “direct the country’s transmission development to areas where RE potential resources are located.”

It similarly noted that “at the end of the CREZ process, several CREZs shall be identified and established in the country.”

It is worth noting that the abysmal integration of RE installations in the past resulted in unwarranted congestion in the transmission system; and had similarly triggered revenues losses on the part of the project developers.

With the country’s grander ambition of 15,300 megawatts of RE installations as underpinned by the DOE-sanctioned Renewable Portfolio Standards (RPS) policy, system integration is seen as another challenging precept in the ranks of the clean energy project sponsors.

Nevertheless, the DOE ordains that the CREZ process is aimed at “overcoming RE development obstacles, such as transmission constraints and regulatory barriers to financial investments by the private sector” – getting there though is just the puzzle that relevant stakeholders would have to unravel moving forward.