Philippines DOE Proposes Policy Allowing Power Generators to Build Transmission Infrastructure

The Department of Energy (DOE) has proposed a new policy that would allow power generation companies to finance and construct transmission infrastructure to accelerate the completion and delivery of power projects nationwide.

According to the DOE, recurring systemic constraints in the national transmission grid have continued to delay the dispatch of new generation projects, particularly from renewable energy developers. The department noted that even when companies build dedicated point-to-point (P2P) connection facilities, limited grid capacity or technical constraints often prevent full power delivery, delaying commercial operations.

“Even with a generation company constructing its own dedicated P2P connection facility, the surrounding transmission grid may still have inadequate capacity or technical constraints, rendering the connection futile and thereby delaying the commercial operation and delivery of the committed power project,” the DOE said.

The agency highlighted that delays in the Transmission Development Plan and overall inadequacy of transmission infrastructure have restricted the entry of new capacities, undermining investor confidence and affecting the reliability, adequacy, affordability, and security of the country’s energy supply.

To address these challenges, the DOE is drafting a department circular that would allow power generators to finance, build, and install new or expanded transmission lines, substations, and related facilities beyond their P2P connections. These “associated transmission projects” are designed to bridge the gap between generation growth and grid readiness.

Under the proposed policy, generation companies would be allowed to recover actual costs under agreements with the National Grid Corporation of the Philippines (NGCP), which would retain oversight of project implementation, financing arrangements, and the eventual turnover of facilities.

The DOE emphasized that the initiative aims to better align transmission development with new generation projects and ensure timely delivery of committed capacities. The draft circular is currently open for public comment until October 15, 2025.