MANILA, Philippines -National Power Corp. signed a memorandum of understanding (MOU) with APTI Renewable Energy Corp. to promote sustainable renewable energy in small power utilities group (SPUG) areas nationwide.
According to Napocor president and CEO Fernando Martin Roxas, the agreement aims to gradually minimize APTI REC’s dependence on fossil fuels and provide more affordable and renewable energy in off-grid areas.
“The MOU will allow us to access APTI REC’s technology on the use of biofuel or palm oil as an alternative fuel. Together, we shall also collaborate to build a prototype bioenergy renewable energy power plant that uses palm oil, and develop an integrated logistical and technical system for the production of biofuel and biomass,” Roxas said.
The partnership with APTI REC, a subsidiary of Asian Pyrochem Technologies Inc., is expected to promote and identify priorities for renewable energy using biofuel and biomass hybrid power in the country.
SPUG areas are those not connected to the national grid and are therefore operated by Napocor. There are currently 281 SPUG plants in 189 municipalities across the country.
Napocor identified SPUG areas as potential locations for APTI REC’s technology since most of them can be converted into palm oil plantations.
“Apart from high fuel prices, off-grid areas also suffer from inclement weather situations that sometimes hinder the delivery of fuel, which in turn affects their power supplies. If we can develop a model of this technology [in] various SPUG areas, we can save costs on fuel and hauling,” he said.
Earlier this year, Napocor called on energy agencies and electric cooperatives to assist in mitigating the impact of funding gaps for off-grid island operations in 2023.
Under Napocor’s corporate operating budget in the 2023 General Appropriations Act, P6.886 billion was allocated for SPUG operations. However, the surge in fuel prices caused insufficient funding, with contracted fuel for this year priced at P74.3475 per liter.
According to Napocor, it needs P3.883 billion in budget augmentation for SPUG fuel supply. Roxas noted that reducing operating hours at Napocor’s SPUG plants was an option to stretch fuel supply until the end of the year, “but this should be the last resort.”
Part of Napocor’s long-term sustainability plan with the Department of Energy is the accelerated hybridization of SPUG power plants with renewable energy resources.