The National Power Corporation (Napocor) has signed separate agreements with Conal Holdings Corporation and Korea Electric Power Corporation to develop renewable energy (RE) projects.

The projects will be undertaken by the Small Power Utilities Group (SPUG) which is Napocor’s missionary electrification arm, mandated to provide electricity to remote islands and far-flung, inland baranggays that are not connected to any of the main grids.

At present, SPUG services 78 small islands and eight off-grid areas while operating 304 generating units with a total rated capacity of 128.997 megawatts. It has 42 customers or off-taker distribution utilities, consisting of 39 electric cooperatives and three Local Government Units.

SPUG vice president Melburgo S. Chiu said they may also sign a similar agreement with state-owned PNOC-Renewables Corporation (PNOC-RC). “We are currently exploring the possibility of entering into joint venture agreements with Kepco, Conal and PNOC-RC,” he said.

He said “PNOC-RC has submitted a proposed MOA but it is not yet finalized. They are looking at Dinagat, Polilio and Casiguran. Right now, they are firming up their business plan.”
Chiu said Napocor is also talking with a European company for possible development of biomass power. “We are now studying various agreements like biomass. It's a European company which plans to introduce a biomass technology,” he said.

He said Kepco and Conal are still looking at areas to explore adding that “there is no definite area yet where they will be going. The agreement is now in Phase 1, where they are looking for possible areas to develop, and what possible technology to use.”

However, Chiu said they are most likely to focus on Palawan and Mindoro where SPUG services are needed. “Right now the biggest market may be Palawan and Mindoro, as about 70 percent of our expenses go there, so if you are a private company, that might be attractive,” he said.

Under the MOA, Napocor would provide data and expertise to the private companies. “We are the one who has information on the SPUG areas,” he explained.

According to Chiu, Napocor was approached by these power firms to determine what areas could use private sector participation. He said these power companies are likely to eye developments in hydroelectric and wind power.