NEDA urges more power investments in rural areas

MANILA, Philippines -  The National Economic and Development Authority (NEDA) is urging power companies to invest more in rural electrification to drive down the cost of power while meeting domestic demand.

During the recently-held Meralco Planning Inputs Cascade Session, Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said power companies have a crucial role in helping sustain the country’s strong economic growth as a stable power supply is vital to the growth of the agriculture, fishery and forestry sectors.

“Noting that energy security is a critical input to stimulating and sustaining socioeconomic development, the private sector can participate in the generation of additional power to meet the growing demands of the country,” said Pernia.

The country’s new medium term development plan notes that despite efforts exerted to pursue nationwide distribution of electricity, many rural and off-grid areas still have no stable access to power.

Average nationwide household electrification level is relatively high at 89.6 percent. The level of electrification in Luzon and Visayas at 94.8 percent and 92.4 percent, respectively, however, is still significantly higher than that of Mindanao at 72.4 percent.

Despite the reasonable level of power provision in the country, incomplete electrification in rural areas is affecting the productivity of the farm, fishery and forestry sectors, the performance of which affects overall economic performance.

Pernia urged power companies to participate in the qualified third party (QTP) program which the Department of Energy (DOE) designed to attract alternative service providers and private investments in rural electrification.

“Participating in energy development projects will promote competition, increase power generation, and ultimately drive down electricity rates,” he said.

 The DOE wants to achieve a 90 percent household electrification target by 2017 but to do this, it has to address supply gaps in underserved areas.

Power firms qualifying under the QTP only have to pass the accreditation process instead of going though a bidding process. After getting accredited, it can select areas for development and start as soon as the DOE approves its plan.

QTP firms must have the power generation and distribution facilities to service remote areas where the distribution lines of power cooperatives cannot be immediately extended.

 “This is consistent with the administration’s plan to prioritize the provision of electricity services to the remaining unelectrified off-grid, island, remote and last-mile communities to achieve total household electrification by 2022.