Fast-Track Status for 24 Off-Grid Micro Grids National Significance: A Breakthrough for Rural Electrification in the Philippines

By

WEnergy Global Pte Ltd

Atem Ramsundersingh, Quintin Pastrana , Kirsten Louise Sagun, EnP and Airam Llanes

Certificate of Energy Projects of National Significance (CEPNS)

In a defining moment for the energy sector, the?Department of Energy (DOE) of the Philippines has granted the Certificate of Energy Projects of National Significance (CEPNS) to all 24 off-grid microgrid projects awarded to the Maharlika Consortium consisting of WEnergy Global Pte Ltd (WEG), CleanGrid Partners Pte Ltd and the Maharlika Clean Power Holdings Corporation (MCPHC). This unprecedented recognition emphasizes the critical role of decentralized renewable energy solutions in achieving the country’s vision of 100% household electrification and clean energy solutions.

The?CEPNS designation?is not merely an acknowledgment it is a powerful mechanism that provides?regulatory clarity, expedited approvals, and increased investor confidence, making the deployment of off-grid energy projects significantly more efficient. It ensures:

• Fast-tracked Processing?– Applications are processed within the prescribed periods under the EVOSS Act and Executive Order No. 30.
• Prioritized Approvals?– Simultaneous processing of permits across agencies without unnecessary delays.
• Presumption of Issuance?– Permits are presumed to be granted unless substantial issues are identified.
• Infrastructure Inclusion?– The benefits extend beyond microgrids to their associated infrastructure.
• Primacy of Rural Electrification – The overarching thrust of empowering the most remote and vulnerable communities is now enshrined and enabled because of this pioneering certification for decentralised solutions through these micro grids.

Off-Grid Electrification: a $6 Billion Market Opportunity

This landmark decision by the?DOE paves the way for further private sector investments in rural electrification, addressing a market valued at over?$6 billion to connect 2.5 million households in the Philippines alone. By reducing transaction costs and removing barriers to entry, the CEPNS mechanism sends a?strong signal to investors, banks, and developers/ operators?that the government is fully committed to facilitating clean energy expansion and micro level too. In addition, reducing transaction costs and providing Microgrid Service Provider Service Contracts (MSCs) for 15-20 years, also mean reducing the Full Cost Recovery Rate, hence reducing pressures on government missionary electrification subsidies that recently increased from PHP 13 billion to PHP 18 billion for the coming years i.e. the government can accelerate the rural missionary electrification effort through more efficient use of budgets.

Interestingly, the impact of 24/7 electrification of households could easily double or triple their economic benefits, in about 1-2 years from the date of commissioning the microgrids. Such incomes would easily earn back the total investment in power infrastructure by a similar factor.

At?WEG, we have been at the forefront of these efforts, not just as project developers but as active contributors to policy reforms over the past 13 years. We have worked closely with?government agencies and communities, leveraging our on-the-ground experience to inform regulatory improvements, going beyond standard business operation to further the cause.

Engaging in rural electrification is more than just turning on a light-bulb —it is about driving economic growth and improving livelihoods. Unlike companies with a DNA of one single large scale project at a time, off-grid microgrid developers require a totally different set of qualities, such as, but not limited to in-depth knowledge of smart technologies for power distribution grids, hybrid power generation systems, power grid behaviour and characteristics, regulatory frameworks and business models, financial modelling connecting engineering with financing, multi-stakeholder engagements, mobilising and increasing the readiness of households and SMEs to get connected to the power grid, billing and collection and customers relations. We laud DOE’s criteria for private sector engagement that technology providers must have ‘skin-in-the-game’ and – to avoid failures – companies cannot just buy new technologies without deep understanding of operations and maintenance of such facilities.

In turn, the results in just a about 5.5 years speak for themselves in terms of Sustainable Development Goals in Action as evidenced with our flagship microgrid in Sabang, Puerto Princesa. Among them:? an 80% reduction in crime, 66% reduction in mortality, a 70% increase in livelihood income, a doubling of business registration primarily by women entrepreneurs, and an increase in educational attainment results for students from 85% to 91%, which will be scaled up and across our new host communities for good.

The Microgrid Systems Act: Enabling a Transformative Energy Landscape

Our commitment to the energy transition extends beyond project implementation.?WEnergy Global played a pivotal role in shaping Republic Act No. 11646, also known as the?Microgrid Systems Act, which was signed into law in January 2022. This legislation?accelerates total electrification in unserved and underserved areas?by:

• Encouraging private sector participation.
• Providing a clear and stable regulatory framework.
• Promoting scalable and sustainable micro grid solutions.

Through capacity-building dialogues with the?Senate Committee on Energy, we contributed to the creation of?a fair and forward-looking energy policy that aligns regulations with emerging technologies and business models. This signifies WEG’s effort to promote impact-driven energy transformation.

Technology for Good: Private Sector Driving Systemic Change

The issuance of the?CEPNS reaffirms that governments and the private sector can work together?to drive meaningful change. By integrating?technological advancements with smart financing and regulatory support, we can?demonstrate that off-grid electrification of over 2.5 million households in the Philippines is not a high-risk endeavour but a viable, investable, and scalable solution.

WEG, with the support of its partners MCPHC and CGP, is proud to have contributed to this journey through 13 years of pioneering work, relying on the technical approaches developed and tested by its teams (including the use of Singapore’s Experimental Power Grid Center, a $50 million research facility, for simulations over 10 years ago).

With the flagship off-grid microgrid in Sabang, Puerto Princesa City, Palawan, now successfully operating since August 2019 serving close to 600 residential and commercial consumers powered by 2.6 MW (Solar + diesel), 2.4 MWh of BESS and a smart distribution grid of 14 circuit kilometers, the consortium is ready to start with the construction of 24 new microgrids in 2025 that will connect over 12,500 households and 300 small businesses via 225km of smart grids powered by over 10 MW (solar + diesel) and 7.5 MWh BESS.

While the Sabang project struggled through a 7 years journey of bureaucracy to obtain approvals and permits, we appreciate that the current DOE has made drastic improvements by reducing red tapes i.e. the time period to obtain approvals under the MGSP Act seems to be going towards 3-4 years (a period we believe can still be reduced to encourage more players to enter the market). The hope is that the stage DOE is setting will lead to an approval process that requires less than a year.

The issuance of the CEPNS is a milestone set by DOE to power collaboration between the public and private sectors. We extend our gratitude to the?DOE, National Power Corporation, National Electrification Administration, Energy Regulatory Commission, and our dedicated partners?who continue to push the boundaries of energy access. Looking ahead, we remain committed to building energy systems that are not only sustainable, but transformative, and look forward to this recognition for all newly awarded projects under the MGSP Act to help achieve a shared goal of 100% household electrification within this decade.