Smart and Green Grid Plan (SGGP)

The Smart and Green Grid Plan (SGGP) is a strategic blueprint being formulated by the DOE for the development, deployment, and operation of a modern transmission infrastructure that supports the integration of clean energy sources and enables a sustainable, reliable, and resilient power grid [PEP 2023-2050 Vol. I, p.100, 2023].

Purpose

The SGGP is designed to resolve a structural problem in the Philippine energy transition: large-scale RE deployment (solar and wind) can be built in 1–2 years, but transmission infrastructure planning and development can take 10 or more years. Without proactive grid modernization, RE projects become stranded [PEP 2023-2050 Vol. I, p.100, 2023].

Under CES-1, the VRE share (solar + wind) in generation reaches 35.3% by 2050. At these penetration levels, ramp-down of VREs from 100% to 0% capacity at any time creates severe grid reliability risks that require smart grid management and energy storage response [PEP 2023-2050 Vol. I, p.101, 2023].

Formulation Timeline and Lead Organizations

The groundwork for crafting the SGGP commenced in May 2023 and is targeted for completion by Q1 2024 for inclusion in the PEP. The SGGP is led by the DOE with support from TransCo and a group of technical consultants, funded by the USAID Energy Secure Philippines (ESP) Project [PEP 2023-2050 Vol. II, p.85, 2023].

Upon completion, the NGCP must adopt the SGGP’s proposed transmission infrastructure projects and submit an implementation plan within six months of PEP publication, ensuring that the identified transmission projects are integrated in the next TDP regulatory period [PEP 2023-2050 Vol. II, p.85, 2023].

Specific Planning Objectives

The SGGP transmission expansion planning must satisfy the following objectives simultaneously [PEP 2023-2050 Vol. II, p.85, 2023]:

1. Support generator entry and accommodate load growth
2. Accommodate high variable renewable energy (VRE) integration
3. Remain adequate during demand peaks
4. Enable offshore wind integration by 2030
5. Implement Mindoro and Palawan interconnection to Luzon
6. Extend Northern Luzon transmission corridor
7. Facilitate least-cost market dispatch throughout

World Bank Technical Assistance Findings

The World Bank conducted a technical assistance study titled “Technical Assistance on Transmission Development in Support of Offshore Wind Deployment and Improved System Reliability in the Philippines” to inform the SGGP’s transmission expansion priorities [PEP 2023-2050 Vol. II, p.84, 2023].

Key finding: Under a gradual OSW deployment portfolio, the WB analysis identified Northern Mindoro, Northwest Luzon, and Manila as having 6.0 GW of potential OSW capacity with the lowest levelized cost of energy (LCOE) of PhP0.27 per kWh — meaning proactive transmission investment in these three corridors unlocks the most cost-effective offshore wind resources first.

2050 Grid Planning Process

The SGGP’s 2050 Grid development follows a systematic process [PEP 2023-2050 Vol. II, pp.84–85, 2023]:

1. Generator siting — Uses GIS layers to identify optimal locations for future expansion, considering RE service contracts, CREZ designation, existing transmission network, petroleum service contracts, LNG terminals, and topography
2. Generator sizing — Determines appropriate plant sizes per technology type for designated sites
3. Demand forecasting — Uses the 2023 Nodal Demand Dispatch Schedule from IEMOP as basis for spatial disaggregation
4. Dispatch scenario determination — Accounts for seasonal/daily demand changes, VRE intermittency at varying penetration levels, and BESS deployment scenarios
5. Network expansion identification — Identifies all feasible projects including capacity/voltage upgrades, new corridors, and voltage regulation; optimizes the combination and schedule to minimize investment while ensuring grid adequacy and security

Relationship to CREZ

The SGGP integrates the outputs of:

• CREZ-1 — 25 designated RE Zones identified for proactive transmission investment
• CREZ-2 — Extension of CREZ to include battery storage sites, enabling ancillary services for VRE

See Competitive Renewable Energy Zones (CREZ) .

NGCP Implementation Concerns

The DOE has raised concerns about the rate of NGCP’s transmission expansion. Since 2009, the transmission grid expanded by only 8% in total line length; during the pre-pandemic years, NGCP ’s line expansion averaged only 1% per year. This pace is insufficient to support the RE targets embedded in the CES scenarios [PEP 2023-2050 Vol. I, p.107, 2023].

The DOE promulgated DO 2023-06-0018 (8 June 2023) creating the Performance Assessment and Audit Team for the Operations of the Transmission Network Provider and System Operator (PAAT-TNPSO) to provide a formal mechanism for evaluating NGCP’s compliance with its mandate, franchise obligations, and operational standards under the Philippine Grid Code. The PAAT is DOE-led with members from GMC, PEMC, TransCo , ERC , and PSALM [PEP 2023-2050 Vol. II, pp.84–85, 2023].

BESS and Storage Integration

The SGGP incorporates ESS requirements:

• CES-1: 22 GW BESS + 2.3 GW pump hydro storage by 2050
• CES-2: 24.7 GW BESS + 2.1 GW pump hydro storage by 2050

These serve as ancillary services for grid reliability as VRE share grows [PEP 2023-2050 Vol. I, p.101, 2023]. As of September 2023, the near-term committed BESS pipeline stands at 2,024 MW, with 1,826.6 MW indicative. See Battery Energy Storage Systems (BESS) and Energy Storage System Policy .

OSW Integration

The SGGP provides the transmission backbone needed to connect OSW farms (sited offshore or in remote coastal areas) to demand centers. OSW development and grid expansion must be coordinated — OSW contracts require transmission readiness before construction begins. See Offshore Wind (OSW) .

OPAF regulatory mandate: DC2023-06-0020 (OPAF, June 2023) requires the NSP to prepare the SGGP specifically for OSW grid connection within 180 days of OPAF effectivity. ERC is directed to support the capital expenditure requirements for OSW grid connection in accordance with applicable rules [DC2023-06-0020, Section 13, 2023-06]. This places a specific OSW-focused SGGP obligation on the NSP separate from the broader PEP-driven planning process.

Smart Distribution Utility Roadmap (SDUR) Status — December 2022

Under DC2020-02-0003 (National Smart Grid Policy Framework), all 99 Distribution Utilities are required to submit Smart Distribution Utility Roadmaps (SDURs). Status as of December 2022 shows most DUs remain far below Level 1 maturity [PDP 2023-2050, Table 54, p.130, 2025]:

79 of 99 DUs (80%) are at Level 0 or Partially Level 1 for Networks — a significant implementation gap relative to the 2040 full smart grid transition target. The DOE attributes lagging compliance to challenges in acquiring and implementing smart grid facilities.

Note: Confidence is medium — the SGGP was under formulation at the time of writing (target Q1 2024); the completed plan itself has not been ingested.