The One Grid Philippines and rooftop-mounted solar PV power

One of the things one could be thankful for throughout the trying COVID-19-quarantine period (before June 1, 2021, 2 p.m., Tuesday) was that basic services — electricity and water — have flowed without interruption making working from home (WFH) and quarantining more bearable. Having also recently installed an entry level 2.3-kw rooftop solar PV installation, I was not conscience-stricken when running my air-conditioning unit during the day. My electricity use is small enough so I am actually contributing power to the grid through the net metering scheme on particularly sunny and sweltering days. One could work in relative comfort without the oppressive three-hour commutes.

Then at 2 p.m., June 1, the unexpected happened: no lights, no TV, no internet, no recharge for batteries. It turns out that rooftop solar PV panels will not supply electricity to the house under a net metering arrangement when the grid is down. You need battery storage and some extra work which would have doubled the cost of the installation and which I could not afford. When soon after the rains began to fall, I thought the power shortfall episode was over for 2021. But the National Grid Corporation of the Philippines (NGCP) raised the yellow alert again on July 13. Power alerts are now happening during the rainy season.

And so, the ritual of blame and finger pointing started again! Congress blames the Department of Energy (DoE) for promising no brownouts during an April 27, 2021 hearing; the DoE blames the grid operator NGCP for not procuring only 50% of Energy Regulatory Commission (ERC) mandate ancillary power supply resorting instead to cheaper non-firm ancillary supply (AS) contracts. The DoE also blamed some power generators for going on extended or unplanned shutdowns despite the prohibition of the same during summer months. Others blame the ERC for not coming down hard on the NGCP for the known shortfall in procurement of AS. Others blamed the general state of power generation’s dependence on aging coal power plants and why replacement facilities haven’t come on stream. Nuclear power generation has been in the planning board of Energy Secretary Alfonso Cusi’s DoE from the start, a good clean alternative, but it is taking too long for us to iron out the kinks. If we are to see the back of this repeat refrain in 2022, we will need some decisive actions on quicker remedies.

In April 2020, in the midst of a yellow alert, I wrote “Embracing the Light” (https://www.bworldonline.com) where I batted for the faster adoption of solar PV installations mounted on idle rooftops of large business establishments. Solar PV installations have now become a very attractive investment, what with technical advances and scale production. But the advantages escalate when these are mounted on idle rooftops: no NIMBY, drastically reduced license requirements, no transmission cost, and no universal and other fixed cost charges that together constitute about 50% of the monthly bill of power flowing through the grid. The cost savings per kWh can be considerable.

During the day, these installations act like the Interrupted Load Program where large establishments start firing their backup generators and stop drawing from the grid to shave off the peak of power demand upon prompting by the grid operator. The big difference is that these installations shave off peak demand permanently during daytime. Greater resilience is accorded when rooftop mounted solar PVs are twinned with battery storage to boost grid power in case of spikes in demand after sundown. Rooftop mounted solar PV installations take very little to time to put up and power could be flowing within a few months after the decision to install. Firms could also start small and scale up as needed since by its very nature solar PV technology is modular. Rooftop-mounted solar PV projects can now hold their own from the bottomline viewpoint alone, especially on levelized cost standard.

To pump prime adoption, perhaps Congress should consider a law mandating a contingent tax for idle rooftops: large idle rooftops owned by large corporations will be meted a tax which automatically goes away after, say, 15% of the idle rooftop is solarized. Let large corporations earn part of the 5% reduction in corporate tax which private corporations now enjoy under CREATE (Corporate Recovery and Tax Incentives for Enterprises Act). Meanwhile, technology-promoting government agencies such as the Department of Science and Technology, the National Economic and Development Authority, the Bangko Sentral ng Pilipinas, the University of the Philippines, the Department of Trade and Industry, state universities and colleges, and the Department of Education should lead the rooftop solarization initiative and become part of the solution to power shortage.

The Philippines is a small and fragmented power market with a patchwork of island power grids weakly connected to each other. What we should have instead is a robust “One Grid Philippines” that can comfortably conduct power from one island market to another. This will reduce the risk of a power shortfall in individual islands. The Mindanao grid is all on its own. Negros Island is a power surplus island (with a preponderance of renewables solar, geothermal, and biofuel) but its capacity to export to Cebu and Luzon is limited by the 180-megawatt capacity of the submarine cables connecting the island chain (now reduced to 90 megawatts due to damage by Department of Public Works and Highways dredging). So, while we have power alerts in Luzon, we may have excess power and even power curtailments in Negros and Mindanao.

The power forecast for June 1-7, 2021 was an operating margin of 4.5% for Luzon (danger, the alert trigger being 4%), 13.4% in the Visayas (comfortable), and 36.7% in Mindanao (very comfortable due to abundant hydropower with rains). Visayas and Mindanao, at a 10% operating margin could have exported a combined 400MW to Luzon had the submarine cables been adequate. That would have helped ease the Luzon power problem.

The One Grid Philippines is one hope that can avert power alerts in Luzon and Metro Manila in summer 2022 and beyond. The NGCP promised to deliver by November 2020 the Mindanao-Visayas Interconnection Project (MVIP), a 450-megawatt capacity fiber optic submarine cable linking Dapitan City in Zamboanga del Norte to Santander in Cebu Province. Power surplus in Mindanao can now be exported to Cebu and Luzon and vice versa. This will also reduce the temptation to game the system for higher electricity prices by the generators in one market as well as reduce curtailment cost to the system.

But the November 2020 start of operation of MVIP was delayed by reported cable damage the cause of which remains unknown. A sinister angle is whether the report was “fake news” to win a reprieve from contract deadlines. One thing is clear, if it came through as planned, the red alert and manual load interruptions in Metro Manila and environs may have been shortened or even altogether averted. Damage or no, power through MVIP and the Negros-Cebu connection should not take another year and a half to start flowing. Otherwise, suspicions of hanky-panky will resurge.

Raul V. Fabella is an Honorary Professor of the Asian Institute of Management (AIM), a member of the National Academy of Science and Technology (NAST) and a retired professor of the University of the Philippines. He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.