Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 238
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NGCP to conduct the same.73 The RE developer is responsible for the costs of the FS.74
Under the RE Act, NGCP is also obligated to
determine the maximum penetration limit
of intermittent RE plants to the grid through
the conduct of technical and economic
analysis.75 Simultaneous to the conduct of
these studies by NGCP, the DU involved will
undertake a distribution impact study.76
Upon transition of the RE project to the
Development and Commercial Stage (DCS),
the RE developer is responsible for securing a Grid Connection Agreement (GCA)
with NGCP. The GCA must adhere to the
Open Access Transmission Service (OATS),
the Philippine Grid Code, and open access
procedures.77 Upon NGCP’s approval of
the proposed RE project, the RE developer
may start construction of its facilities at
the connection point approved by NGCP.78
This construction may be in parallel with
the execution of the Transmission Service
Agreement (TSA) and a Metering Service
Agreement (MSA) between the RE developer
and NGCP. It is worth noting that NGCP is
mandated to provide revenue meters to all
RE installations.79
Republic of the Philippines
5.2. Responsibility for construction costs
of the onshore grid connection
While it is NGCP’s obligation to maintain the
grid, the RE developer is generally responsible for financing the construction and maintenance of the infrastructure and connection assets that connect the RE plant to the
grid. Current regulations provide that the RE
developer shall be financially responsible for
all costs associated with the procurement
and installation of connection assets identified in the FS, including financing costs.
The RE developer shall also be responsible
for the payment of associated operation
and maintenance costs. 80 However, the RE
developer and the NGCP may agree that the
operation and maintenance of the connection assets shall be managed by the NGCP.
In such case, the RE developer shall pay a
connection charge based on associated
operation and maintenance costs. 81
The 2022 OATS Rules recognizes the option
of a Contribution in Aid of Construction
(CIAC) arrangement. 82 Under this CIAC arrangement, which is implemented via a TSA,
NGCP will procure the necessary rights of way
and construct the necessary transmission
assets, including transmission lines, for the RE
73 Id., B.15.2
74 Id., B15.4
75 RE Act, Section 20.
76 See World Bank Group, Offshore Wind Roadmap for the Philippines, available at https://www.doe.gov.ph/sites/default/files/pdf/announcements/
Philippine-Offshore-Wind-Roadmap.pdf?withshield=1 (last accessed February 28, 2022).
77 Id.
78 Id.
79 Id.
80 Open Access Transmission Service Rules 2022, B.17.1
81 Id., B17.4
82 Id., A1
