UNDERSTANDING THE ENERGY SUPPLY CHAIN Engr. Eduardo B. Fernandez

E-Power Mo: Energy Consumer and Stakeholders Conference 12 July 2017 | Philippine International Convention Center, Pasay City

Department of Energy Empowering the Filipinos PRESENTATION OUTLINE

1 2

Power Demand and What is WESM Supply Chain • WESM Basic Features • Power Myth • How WESM bidding • Transformation of fuel works into electricity • RTD Scenarios • Types of Power Plant Power Demand and Supply Chain

TRANSMISSION

DISTRIBUTION GENERATION

CONSUMERS

Department of Energy Empowering the Filipinos Reality Check

Bakit sobrang mataas ang presyo ng ating kuryente?

Mali ba ang composition ng power Bakit parang mas mababa generation mix ng ating bansa? ang presyo ng kuryente nung panahon ng NPC?

Bakit mas mataas ang presyo Tama nga ba na ng kuryente natin compared privatized ang planta ng sa ibang ASEAN countries? NPC?

Kaya ba mataas ang ating power rate gawa ba ng WESM?

Department of Energy Empowering the Filipinos Transformation of fuel into electricity

Department of Energy Empowering the Filipinos NPC Assets

. NPC Power Plants 121 (11,361 MW) . Transmission lines (10,494 ckt. km.) . Substation Capacity (20,041 MVA)

Department of Energy Empowering the Filipinos NPC Assets

Department of Energy Empowering the Filipinos Types of Power Plant

GENERATION Base Load Plants CUSTOMERS

• Plants which can generate dependable power to consistently meet demand • Produce continues, reliable and efficient power at low cost • Run 24/7 throughout the year except in cases of repairs or scheduled maintenance

600 MW 610 MW 1294 MW Pagbilao Coal-fired Power Plant Leyte Geothermal Power Plant Sual Coal-fired Power Plant

Department of Energy Empowering the Filipinos Types of Power Plant

GENERATION Intermediate Load Plants CUSTOMERS

Fill the gap between base load and peaking plants • Larger than peaking plants so the construction cost are higher • They also run more efficiently

500 MW 1060 MW 1200 MW San Lorenzo Natural Gas-fired Plant Sta Rita Natural Gas-fired Plant Ilijan Natural Gas-fired Plant

Department of Energy Empowering the Filipinos Types of Power Plant

GENERATION Peak Load Plants CUSTOMERS

• Provide power during peak system demand period • Higher responsive to changes in electrical demand and can be started up relatively quickly (Hydroelectric Power Plant) • Very expensive to operate, relative to the amount of power they produce and the cost of fuel to power them (Oil-based power plant)

116 MW 360 MW 755MW Subic Diesel Power Plant Magat Hydroelectric Power Plant CBK Hydroelectric Power Plant

Department of Energy Empowering the Filipinos Typical Load Curve

Peak Reserve Margin Requirement

MW Intermediate

Base load

TIME OF DAY

Department of Energy Empowering the Filipinos Stacking of Power Plants

GENERATION

DIESEL 10,000

OIL THERMAL

8000 HYDRO

6000

NATURAL GAS

4000

2000 COAL

MW GEOTHERMAL

Department of Energy Empowering the Filipinos Coal Power Plant

Department of Energy Empowering the Filipinos Pagbilao Power Plant

2 X 382 MW, Isla Grande-Quezon

Department of Energy Empowering the Filipinos Natural Gas Power Plant

Department of Energy Empowering the Filipinos Natural Gas Combined Cycle Power Station

1,200 MW Ilijan, Batangas

Department of Energy Empowering the Filipinos Hydro Electric Power Plant

Department of Energy Empowering the Filipinos Magat Hydroelectric Power Plant

360 MW Santiago City / Alfonso Lista, Ifugao / Ramon, Isabela

Department of Energy Empowering the Filipinos WESM Stakeholders

GENERATORS TRANSMISSION

DISTRIBUTION

CONSUMERS

Department of Energy Empowering the Filipinos How WESM Bidding Works

G DUs/ECG NPC Market Clearing Plants Results:  Energy 2 s 4 demand MCPs and MOT  Reserve requirements G  Energy 1 offers/bids System Condition: NPC IPPs  Reserve • Outages 3 offers • Contingencies • Transmission limits 7 Billing & Settlement Dispatch G Charges & Payments Instruction IPPs s: Dispatch 5 targets G Revenue Meters: NGCP G Metered values 6 IPPAs G WESM Basic Features

GROSS POOL - All energy transactions are scheduled in the market

GROSS DISPATCH - Generators submit energy offers (price and Quantity) for central scheduling and dispatch

TRADING HOURS - 24 hours/day, 7 days per week

LOCATIONAL MARGINAL PRICE - Marginal price computed at each node or location to reflect transmission loss and/or congestion WESM Basic Features

GOVERNANCE - Governed by stakeholders (PEMC)

TRADING GUARANTEES - Prudential guarantees to assure payment

NET SETTLEMENT - Bilateral Contract quantities transacted in the pool, but, can be settled outside of the market. Ex-ante price and quantity aligned with ex-post price and quantity

BILLING & SETTLEMENT - 60 days period for B&S How WESM Bidding Works

• WESM

GENERATION CUSTOMERS DUs/ECs

Hydro C Geogas F Diesel H P 0,000/MWh P P 4,000/MWh 25 MW 3,000/MWh 200 MW 150MW

Hydro B 50 MW P Natgas E Roxas Boulevard Demand 1,000/MWh - P 1,000/MWh Bunker G Requirements: 600 MW P 3,500/MWh Wind/Solar 100MW 300 MW 5 MW Priority Dispatch Coal D P 2,500/MWh 115 MW

Run-of-River 50 MW Biomass Non- 5MW Scheduled Priority Dispatch Merit Order Table

Market Clearing Price - Php 3,500/MWh (marginal cost of meeting demand) Marginal Plant – Bunker G Price Taker

P/MWhr 600 MW 4,000

3,000

2,000

1,000

300 400 550 MW Geogas F Bunker G Diesel H Hydro B Coal D P 3,000/MWh P 3,500/MWh P 4,000/MWh 50 MW P 150MW 300 MW 200 MW P 1,000/MWh 2,500/MWh Biomass Hydro C 115 MW 5 MW Non- Natgas E P Plant Solar/Wind Priority scheduled - P 0,000/MWh Pmin 5 MW Dispatch 25 MW Must Plants 1,000/MWh Dispatch 100MW Merit Order Table

P/MWhr 600 MW 4,000

3,000

2,000

1,000

300 400 550 MW Geogas F Bunker G Diesel H Hydro B Coal D P 3,000/MWh P 3,500/MWh P 4,000/MWh 50 MW P 150MW 300 MW 200 MW P 1,000/MWh 2,500/MWh Biomass 115 MW 5 MW Non- Natgas E Plant Solar/Wind Priority scheduled - P Pmin 5 MW Dispatch Must Plants 1,000/MWh Dispatch 100MW Merit Order Table

Market Clearing Price - Php 4,000/MWh (marginal cost of meeting demand) Marginal Plant – Diesel H Price Taker

P/MWhr 600 MW 4,000

3,000

2,000

1,000

300 400 550 MW

Geogas F Bunker G Diesel H Coal D P 3,000/MWh P 3,500/MWh P 4,000/MWh P 150MW 300 MW 200 MW 2,500/MWh Biomass 115 MW 5 MW Non- Natgas E Plant Solar/Wind Priority scheduled - P Pmin 5 MW Dispatch Must Plants 1,000/MWh Dispatch 100MW Merit Order Table

P/MWhr 600 MW 4,000

3,000

2,000

1,000

300 400 550 MW

Geogas F Bunker G Diesel H Coal D P 3,000/MWh P 3,500/MWh P 4,000/MWh P 150MW 300 MW 200 MW 2,500/MWh Biomass 115 MW 5 MW Non- Natgas E Plant Solar/Wind Priority scheduled - P Pmin 5 MW Dispatch Must Plants 1,000/MWh Dispatch 100MW Real Time Facility Status

Department of Energy Empowering the Filipinos Thank You!

DOE-Electric Power Industry Management Bureau (EPIMB) Power Market Development Division (PMDD) (+632) 479840-29001773 [email protected]@gmail.com www.doe.gov.ph //doe.gov.ph @doe_ph

Department of Energy Empowering the Filipinos