CHALLENGES OF DEVELOPING MICROGRIDS IN THE PHILIPPINES Meralco’s experience on Cagbalete Island and Isla Verde RAMON L. ASAÑA Jr. Head, Network Technology Strategy and Architecture Manila Electric Company (MERALCO) Outline ▪ MERALCO Company Profile ▪ Overview on Rural Electrification in the Philippines ▪ Overview on Microgrids ▪ MERALCO Microgrid Implementations ▪ Key Challenges of Developing Microgrids in the Philippines based on Meralco’s Experience on Cagbalete Island and Isla Verde 2 We are the largest power distribution company in the Philippines, serving close to 27 million Filipinos in 111 cities and municipalities, and in a franchise area of over 9,685 km2. We serve the country’s social, political, and economic centers where 50% of our GDP is produced. We are US$7.4 billion* company, serving our customers for the past 115 years, with the commitment to be the total energy solutions provider of choice in the Philippines. _________________ 7,399 MW peak demand (2018 YTD) 41,389 GWh energy (output) sales 120 substations / 17,795 MVA substation capacity *Market capitalization as of end 2017 Overview on Rural Electrification in the Philippines As of 2017, only 90.65% of the households in the Philippines and 97.73% in Meralco’s Franchise Area have access to electricity Distribution of Unserved HH Population Household Distribution Unserved Households Projected Served HH Electrification Utilities HH (2015) Level (%) Meralco 6% Other DUs Electric 9% 13.34 11.72 1.62 87.92 Cooperatives MERALCO 7.00 6.84 0.16 97.73% Electric Cooperatives Other 85% Distribution 2.29 1.95 0.34 85.05 Utilities Grand Total 22.63 20.51 2.12 90.65% Notes: • The Household Population number was projected and provided by NSO based from the 2010 Census • Served Household figure was sourced from the consolidated Distribution Development Plan (DDP) 2015-2024 of all the Distribution Utilities (DU) and National Electrification Administration’s (NEA) Status of Energization Reports Source: NEA Updates on Rural Electrification Program; 2016 Year-end Page 4 Overview on Rural Electrification in the Philippines Rural Areas Electricity Service Hours • The Philippines is an archipelago of 7,641 islands • About 2,000 islands are inhabited; hundreds of small islands have limited or no access to electricity • These islands are usually powered with diesel generator sets only o Only 18 out of 287 areas (or 6.2%) have 24/7 electricity; Source: MEDP – DOE 2016-2020 o 84 out of 287 (or 29.3%) have 10-22 hours; o while the rest (64.2%) have less than 10 hours of electric service Page 5 Overview on Rural Electrification in the Philippines Philippine Rural Electrification Target The 100 percent electrification of targeted and identified households accessible to the grid is target to be attained by 2022, while the 100 percent electrification of household in off-grid areas are expected in the long term period (2023-2040). Page 6 Overview on Microgrids Key Components of a Microgrid A microgrid is a localized energy grid aimed to achieve specific grid objectives, with the capability to Key Components: Non-exhaustive disconnect from the traditional grid and operate autonomously 1 Distributed Generation Fossil Fuel, Renewable Energy 2 3 Controls EMS, DR, Dynamic Pricing 3 Energy Storage Utility Batteries, Electric Vehicles 4 4 1 2 Electric Load Single, Multiple, Distributed *Microgrid designs vary based on the scope of work and the complexity of the objective Source: HOMER Energy Page 7 Overview on Microgrids Distributed Energy Resources Types: Small Wind Solar PV Turbine Combine Heat Micro Hydro and Power www.energids.be www.homepower.com http://www.seao2.com www.eneria.fr Biogas Generator Tidal Energy Generator Diesel Generator Page 8 Page 9 Page 10 Overview on Microgrids Integrating Intermittent Energy Sources in Microgrid Intermittent + Energy Storage = Stable Power Intermittent + Dependable Supply = Stable Power Intermittent + Energy Storage + Dependable Supply = Most Ideal Page 11 Overview on Microgrids Energy Storage Technology in Microgrid Lead Acid Battery Vanadium Redox Flow Battery Lithium Ion Battery Page 12 Overview on Microgrids Microgrid Modes of Operations Parallel/Grid-tied ▪ Operating connected and synchronized to the main grid ▪ Power may flow in and out of the microgrid University of California San Diego Microgrid (USA) Island/Isolated ▪ Operating independently from the main grid Miyako Island Microgrid (Japan) Camiguin Island Page 13 Overview on Microgrids What are the Use Cases of Microgrids? Economics Achieve incremental income / cost • Self-Consumption • Diesel Optimization savings for the end-user by creating 1 • Battery Arbitrage an optimal energy mix in both • Peak Reduction • Net Metering supply and demand side • Facilities Upgrade Deferral Ensure business continuity to end- Power Quality and 2 users by increasing quality of Reliability electric service Market Participation Participate in the Electricity Energy, 3 • Energy Reserve and Ancillary Services • Reserve • Ancillary Services market Provide electricity to off-grid 4 Electrification communities Page 14 MERALCO Microgrid Implementations Meralco’s Microgrid Implementations APPLICATION ✓ Microgrids for the electrification of households located in remote islands and far-flung areas ✓ Hybrid energy system composed of solar PV, battery storage, and diesel gen-set to replace full diesel gen-set scheme as power source CAGBALETE ISLAND ISLA VERDE LOCATION LOCATION Cagbalete Island is situated Isla Verde is situated along the in Mauban, Quezon and can bodies of Verde Island Passage be accessed via 1-hour boat between the Luzon main island ride from Mauban Port. It is and Mindoro. It lies south of a booming tourist attraction Batangas City and is composed because of its beautiful of 6 barangays. white sand beach. CUSTOMERS CUSTOMERS There are about 1,990 There are about 887 households in the island that households in the island that currently have no access to currently have no access to electricity. electricity. Page 15 MERALCO Microgrid Implementations Current Power Supply Situation EXISITING POWER SOURCE AVAILABILITY DIESEL 6pm – 10pm GENERATORS Sizes range from 5 – 30 KVA daily operation Few residents with their own diesel generators Note that not all households have access to are also selling electricity to neighbors electricity DISTRIBUTION SYSTEM POWER QUALITY Low quality of power due to: 230V • high voltage drops • overloaded generators single-phase system (evident on the flickering of the lights) Page 16 MERALCO Microgrid Implementations Objectives of the Pilot Projects ❑ Evaluate the feasibility and sustainability of using Microgrids for island electrification in providing reliable, affordable, sustainable, and clean 24/7 electric service • Demonstrate stable system operation with high RE penetration • Prove financial viability (least cost option) • Develop a sustainable O&M scheme • Develop a communications plan for the residents to boost awareness ❑ Gain actual learning experience from planning to operations and maintenance of Microgrids ❑ Prepare Meralco for future Microgrid installations • Replicate to other areas for electrification Page 17 MERALCO Microgrid Implementations Resource Assessment Cagbalete Island Page 18 MERALCO Microgrid Implementations Load Curve Estimation of Cagbalete Island Page 19 MERALCO Microgrid Implementations Proposed Microgrid Scheme for Cagbalete Island Monocrystalline Consumption Prime Polycrystalline Flow Curve Back-up Thin Film Lithium Based Load CAPEX/OPEX • Hybrid Optimization Modeling Software used for designing and analyzing hybrid power systems • It allows the user to input hourly power consumption profile and match renewable energy generation to the required load allowing a user to analyze microgrid potential, peak renewables penetration, ratio of renewable sources to total energy, and grid stability • Additionally, It contains a powerful optimizing function that is useful in determining the cost of various energy project scenarios. This functionality allows for minimization of cost and optimization of scenarios based on various factors. Page 20 MERALCO Microgrid Implementations Proposed Microgrid Scheme for Cagbalete Island 60 kWp 150 kWh 2 x 30 kW Solar PV Battery Storage Diesel Generator AC DC DC SYSTEM INTEGRATION PV Inverter Battery PCS Generator Controller AC AC AC communication communication communication Micro-Grid Loads Controller 30 kW (200 HH) Page 21 MERALCO Microgrid Implementations APPLICATION: ISLAND ELECTRIFICATION CAGBALETE ISLAND MICRO-GRID SLD 230 V Line to Ground 3PH 4W Load Gen-Sets Master Controller Micro Grid Controller Isolating Controller Controller Transformer AC AC Inverter PCS DC DC DC Line AC Line Communication Line Page 22 Key Challenges of Developing Microgrids in the Philippines Daily Generation Profile (Illustrative) Page 23 Key Challenges of Developing Microgrids in the Philippines Key challenges in developing Microgrids in the Philippines Affordability Regulatory Policies Logistics Choice of Technology & Scalability Sustainability System Optimization Page 24 Key Challenges of Developing Microgrids in the Philippines Key Challenge: AFFORDABILITY OF ELECTRICITY Rates imposed in Cagbalete Island FLAT RATE PER METERED RATE APPLIANCE • Very high electricity price is (Peso/kWh) (Peso/day) currently imposed in the island, about 7 times more than in the • 1 light bulb – P 10.0 mainland • 1 Radio – P 10.0 P 31.00 – 36.00 • 1 TV – P 15.0 per kWh • If rates are subsidized, effectively • 1 Ref – P 20.0 bringing down electricity price