Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 239
Offshore Wind Worldwide 2023
developer. In turn, the RE developer will fund
the said activities necessary to establish the
transmission connection.
While the above arrangement is possible, there is no prohibition on the RE developer from
undertaking the construction of the connection infrastructure at its own cost. Simply put,
the RE developer may, at its own cost, construct the necessary infrastructure to connect
to the grid, while the NGCP procures the right
of way and land rights necessary to establish
the connection to the grid. The ERC expressly
allows a generating plant to install its own
transmission facilities (including transmission
lines) up to the connection point. 83
5.3 Consequences of delays and disruptions of the onshore grid connection
For bigger RE projects, there can be a mismatch between the timing required by NGCP
to get approval and develop the grid infrastructure necessary to support the RE project,
and the schedule that the RE developer has in
mind for the project. 84 The GCA between the
RE developer and NGCP would govern the
delay in the onshore grid connection. Generally, penalties indicated in the GCA will apply
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both ways in the event either party is delayed.
These penalties will normally be linked to
the penalties that the RE developer will be
exposed to with the transmission network
operator under its PSA. 85
5.4 Onshore grid congestions, prioritization of renewable energy, resources, and
compensation mechanisms
As RE plants continued to proliferate over
time, grid-related technical issues have arisen,
leading to the curtailment of wind and solar
power. 86 Wind curtailment has occurred in
the Philippines since 2014. 87 Among the factors driving curtailment are limits on transmission flow, lack of conventional generator
flexibility, conventional generator start-up
and shutdown costs, and reserve requirements. 88 The current laws and regulations
allow the system operator to curtail wind
power in the interest of maintaining system
reliability. 89 Under existing PSAs, curtailment
of RE generation, including wind energy, due
to transmission constraints is considered a
force majeure event.90 Hence, there is generally no compensation entitlement.91
Nonetheless, RE generation is given prio-
83 Energy Regulatory Commission, Resolution No. 25, Series of 2006.
84 Watson Farley & Williams, The Philippines: Key Issues for Developing Renewable Energy Projects August 2018, available at https://www.wfw.com/
wp-content/uploads/2018/08/WFWBriefing-Renewable-energy-Philippines.pdf (last accessed March 1, 2023).
85 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).
86 Watson Farley & Williams, The Philippines: Key Issues for Developing Renewable Energy Projects August 2018, available at https://www.wfw.com/
wp-content/uploads/2018/08/WFWBriefing-Renewable-energy-Philippines.pdf (last accessed March 1, 2023).
87 Greening the Grid: Solar and Wind Integration Study for the Luzon-Visayas System of the Philippines, available at https://www.nrel.gov/docs/fy18osti/68594.pdf (last accessed March 1, 2023).
88 Id.
89 Id.
90 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).
91 Id.
