NGCP allots additional P34 billion capex for 2021-2025

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) has allotted an additional P34 billion in capital expenditures in the next four years for its expansion and upgrade projects across the country.

NGCP filed a petition with the Energy Regulatory Commission to allow it to spend P34.32 billion from 2021 to 2025.

This is on top of the four capex spending proposals from 2020 to 2025 amounting to P262 billion that NGCP previously filed with the ERC.

Of the total, Luzon projects are worth P30.27 billion, Visayas projects (P2.58 billion) and Mindanao projects (P4.81 billion).

The grid protection relay replacement project, which span across the three grids, is worth P8.93 billion.

The biggest project, which is the grid protection relay replacement project, involves the replacement of protection relays in the three grids.

“The replacement is necessary as there are protection relays found to be defective, obsolete, and outdated; There are transmission lines and high voltage equipment with no redundant protections; and there are substations with no breaker failure relay installed,” NGCP said in its application.

The projects in Luzon are the Luzon Voltage Improvement Project, the Pinamucan-Tuy 500-kilovolt (kV) Transmission Line Project – the project with the largest cost in the island grid amounting to P6.24 billion, the South Luzon Substation Upgrading Project, the Ambuklao-Binga 230-kV Transmission Line Upgrading Project, and the Binga-San Manuel 230-kV Transmission Line Project.

In Visayas, NGCP has proposed two projects – the Permanent Restoration of Panitan-Nabas 138-kV Line affected by Typhoon Ursula and the Visayas Voltage Improvement Project 2, which will address power quality issues experienced as early as this year.

There are three proposed projects in Mindanao – the Malaybalay 138-kV Substation Project, the Tumaga 138-kV Substation Project, and the Sultan Kudarat-Pinaring 69-kV Transmission Line Upgrading Project.

NGCP said the capex application was filed despite the absence of the final determination of the fourth and fifth regulatory periods where the ERC sets the maximum transmission wheeling rates for each period.

It said the capex projects are part of its responsibility to ensure a reliable and high-performance operation of the transmission system.

“Thus, to avoid disruption of operation and to ensure continuous compliance with NGCP’s mandate under the EPIRA as transmission operator, it is imperative that the implementation of proposed CAPEX projects be immediately approved,” the grid operator said.

In January, NGCP filed for four separate capex petitions amounting to over P262 billion for the expansion and upgrade of the national grid in the next four years or until 2025.

From 2020 to 2025, NGCP’s Group 1 capex application amounted to P93.38 billion, Group 2 with P24.28 billion, and Group 3 with P112.9 billion. The capex projects are focused on the upgrade and expansion of substations and transmission lines.

Meanwhile, for its capex application for 2021 to 2025, NGCP has allotted P31.33 billion. The projects involve those outside the expansion and upgrade of substations and transmission lines.

Until 2033, NGCP has committed to spend P440 billion in capex to expand and strengthen the country’s transmission network.

“For the 13-year period between 2021 and 2033, NGCP has committed to invest approximately P440 billion in capital expenditures across 211 projects,” it said.

This will support the expected growth in demand at an annual average growth rate of 6.23 percent for 2021 to 2025, 6.73 percent for 2026 to 2030, and 6.49 percent for 2031 to 2040, as detailed in the 2021 consultation draft of the Transmission Development Plan (TDP).

NGCP holds the 25-year concession contract to operate the country’s power transmission network. It is 60 percent controlled by Filipino-owned entities One Taipan Holding Corp.’s Monte Oro Grid Resources led by Henry Sy Jr. and Pacific21 Holdings Inc.’s Calaca High Power Corp. led by Robert Coyiuto Jr. The remaining 40 percent is held by State Grid Corp. of China (SGCC) as its technical partner.