The Government of the Philippines has signed a law to increase the total electrification rate by using microgrid systems in unserved and underserved areas in the country. The Republic Act Number 11646 will ensure that rural areas have constant electricity while favouring low-cost, renewable, and sustainable energy sources.
Microgrid systems providers (MGSPs) will not be needed to obtain a franchise under the law, but they will need permission to operate from the Energy Regulatory Commission (ERC). The new legislation does not consider the ownership and management of a microgrid system in unserved and underserved communities to be a public utility operation.
MGSPs will be able to services the utility-identified unserved areas and unserved and underserved areas declared by the Department of Energy after a competitive selection process (CSP). If there are no participants for a specific location, the National Power Corporation (NGCP) will carry out a missionary electrification project in that area.
The electrification target is expected to be achieved by June 2022 if sufficient funding is available. In 2021, the National Electrification Administration (NEA) declared that about 12,000 sitios were still off-grid and an estimated a budget of PHP18 billion was required to achieve electrification in these regions.