MANILA — President Rodrigo Duterte has signed a law promoting microgrid systems to accelerate the electrification of underserved areas.

Grid refers to the high voltage backbone system of interconnected transmission lines, substations, and related facilities located in each of Luzon, Visayas, and Mindanao.

A smaller microgrid will not incur the high cost of connecting to the main grid and will promote the use of local energy sources like solar, wind, and biomass, proponents of the law earlier said.

Under Republic Act 11646, microgrid operation will not be considered a public utility operation. Hence, a service provider “shall not be required to secure a franchise from Congress.”

Instead, they will secure an authority to operate from the Energy Regulatory Commission (ERC).

The law also removes the requirement for microgrid service providers (MGSPs) to obtain waivers from incumbent franchised utilities to provide electricity in unserved and underserved areas by the Department of Energy.

The competitive selection process for providers should be “simple, uniform, streamlined, and transparent” and may be conduced using a “secure electronic portal,” stated the law that was signed on Friday.

“The entire procedure from pre-qualification of MGSPs until the submission to the ERC of the awarded contract shall be no longer than 90 calendar days after all the published requirements are fully submitted,” ordered RA 11646.

It also tasked the energy department with listing underserved areas not later than September of every year.

In 2018, some 2.7 million households or 11.7 percent of households nationwide had no access to electricity, Sen. Win Gatchalian, who pushed for the law, earlier said.

"The government has stated that total electrification in unserved areas cannot be done by traditional grid extension alone and that non-traditional means - such as microgrid systems - are needed. The problem of energy access is also a concern even in 'electrified' areas with limited electricity service, or what we call underserved areas," the lawmaker said.

"What we will do is to allow proponents to put up microgrids. These microgrids will be self-sustaining, meaning they will be producing as well as distributing power," he added.

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