NPC CHALLENGES IN THE HYBRIDIZATION OF ITS EXISTING DIESEL POWER PLANTS

IN THE MISSIONARY AREAS

Engr. Pio J. BenavidezPresident & CEO, National Power Corporation

www.napocor.gov.ph

Presentation to the Philippines Mini-Grid B2B Forum (Manila, 19-21 September 2018)

9/18/2018 2

NPC EXPERIENCE ON SOLAR HYBRID SYSTEMS AND RE PROGRAMS

Minuyan Solar Power Plant (Grant)

• Funding: 600 Million Yen for 640 kWp from Japan Clean Energy

Program consisting of NPC – 100 kWp, Lung Center – 90 kWp, Rizal

Park – 40 kWp, PNP Sports Center – 310 kWp & Center for Law

Enforcement – 100 kWp)

• Contractor - Japan International Cooperation System and Kanematsu

Corporation

• Date Commissioned: 25 July 2016

General Specifications

• On-Grid PV System rated at 100.17 kWp with 378 monocrystalline PV

at 265 Wp per panel arrange in 13.5 arrays

• ESS Inverter (MW) – 100 kW, 202-420/440 VAC

• ESS Battery Storage (MWh) – None

On-Grid Solar Plant Operations:

• With net metering arrangement with MERALCO

• Operations: No. of employees – 3 operators at P60,663.95 monthly

Limasawa Solar PV-Diesel Hybrid Project (EPC)

Current Situation:

• Limasawa DPP has 2 x 163 kW Dale-Perkins and 1 x 300 kW capacity

addition genset.

• Plant operations extended to 12 hours from 8 hours preparatory to full 24

hours operation.

Project Requirements:

• Design, Supply, Delivery, Installation, Construction, Test and

Commissioning of the Limasawa Solar PV-Diesel Hybrid System

consisting of:

• 120 kWp Grid Solar PV System with Mono-crystalline or Multi-crystalline

Silicon Modules and Auxiliaries.

• 120 kVA / 120 kWh Energy Storage System (ESS)

• 150 kVA, 480V/13.8kV, 3-phase, 60Hz Transformer for ESS and another

150kVA 480V/13.8V, 3-phase, 60Hz Step-up Transformer and associated

electrical equipment and devices for Grid Solar PV System.

• 13.8kV SC/CP 1/0 ACSR (AWG) Distribution Line (approximately

1.5kms) with complete accessories and other appurtenances.

NPC EXPERIENCE ON SOLAR HYBRID SYSTEMS AND RE PROGRAMS

9/18/2018 4

Sabang Renewal Energy Project (QTP)

Specifications:

• Off-Grid Solar PV System: 1.2 MWp of 4,752 - 250 Wp polycrystalline

PV panels in 132 arrays of 36 PV panels per array

• Battery System: 1.8 MWh of 8 stacks with 229 kWh per stack

• Inverter System: 2.1 MWh of 21 inverters at 100 kW output each

• Diesel Genset: 4 x 320 kW

• Intended for approximately 5,830 households, 10 public buildings, 19

cottages/hotels/restaurants and 18 small shops.

Contract Arrangements:

• QTP Service and Settlement Contract between SREC and NPC

• Payment Terms:

- SARR to be paid by PALECO

- UCME based on ERC-approved FCRR to be provided by NPC

- ERC-approved cash incentive to be provided by PSALM.

• Status: SREC and NPC QSSC Petition already with Provisional

Authority but SREC has pending Motion for Reconsideration.

NPC EXPERIENCE ON SOLAR HYBRID SYSTEMS AND RE PROGRAMS

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• Intermittency and variability of solar and wind power supply

• Solar and wind aside from mini-hydro are variable technologies

applicable in off-grid areas

• Being variable and intermittent, electric cooperatives prefer

plants that have base load capabilities

• Need for storage systems to support variable and intermittent

RE sources but with higher investment cost.

• Grid ancillary service requirement with entry of intermittent and

variable RE sources

• Existing RE facilities currently share with the ancillary service

provided by regulation and contingency reserves.

• N-1 contingency criterion is being adopted in SPUG areas as

provision to consider maintenance of generating units.

• With battery or without battery

• Unlike the on-grid areas which RE variability may be absorbed

by the grid, storage system such as a battery is needed in off-

grid areas

• Storage system constitute a major cost item in a Solar PV

system and thus, only minimum storage solution is encouraged

CHALLENGES IN EMBARKING RE SYSTEMS IN OFF-GRID AREAS

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• Compatibility of existing diesel generator sets control systems to

meet solar output variability

• Given NPC-SPUG’s goal to hybridize our existing gensets,

compatibility of existing controls to follow RE output variability

becomes an issue.

• Old control devices need to be replaced with hybridization

• Most missionary areas have poor load profile

• Takes a minimum of one year to firm-up the load profile of an

unserved missionary areas

• Contributes to higher cost of generation and electricity rates with

limited operating hours and little energy sales.

• Need to develop a simplified tool for determining the optimum RE

capacity to be installed in a grid

• Use of Homer Software is complex and subscription is rather

expensive

• ASEP-developed simplified tool for RPS off-grid implementation

• Seemingly lack of private sector interest

• Financially-challenged electric cooperatives

• Economy of scale

CHALLENGES IN EMBARKING RE SYSTEMS IN OFF-GRID AREAS

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• Need to undergo competitive selection process

• Lengthy process of negotiations as in the case of QTPs as well as

ERC approval process.

• Siting of solar farms in mini-grid areas

• Available sites for solar PV farm quite distant from power plant.

• Poor communication facilities in the area

• Tie-line interconnection for solar farm-to-plant communication

interface not to exceed 1.5 kilometers

• ERC position on the recovery of NPC’s CAPEX projects

• NPC-SPUG is mandated to comply with the minimum RE

sourcing requirement under the RPS for Off-Grids.

• NPC-SPUG is currently dependent on NG subsidy for its CAPEX

projects

• Recent approval of the RPS for Off-Grids

• RPS for Off-Grid is 4 years in the making

• Capacity building of Mandated Participants

• Integration of RE requirements in DDPs

• Commencement of Implementation by 2020

CHALLENGES IN EMBARKING RE SYSTEMS IN OFF-GRID AREAS

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• Cash-based incentive for RE Developers

• RE energy sales entitled to cash incentive

• ERC current cash incentive for hydro is P2.05/kWh

• UCME entitlement of RE Developer

• ERC-approved TCGR is higher than SAGR

• UCME Settlement Agreement with NPC

• Fiscal incentives for RE Developers

- Income Tax Holiday - Duty-Free Importation

- Special Realty Taxes - Net Operating Loss Carry Over

- Corporate Tax in 7 Years - Accelerated Depreciation

- Zero Percent VAT Rate - Tax Exemption from Carbon Credits

- Tax Credit on Domestic Capital Equipment & Services

• Priority dispatch, whenever available, to displace more expensive

generation

• ERC Resolution No. 15, series of 2014

• Subject to availability of load demand and grid stability

requirements

BENEFITS OF RE DEVELOPER IN OFF-GRID AREAS

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NATIONAL POWER RENEWABLE ENERGY PROGRAM

Peak

Demand

(kW)

Proposed Solar

PV Capacity

(kW)

Estimated

Project (MnP)

186 120 55.55

132 100 53.56

1537 1,248 731.42

905 724 453.70

818 654 430.59

707 566 390.77

600 480 348.21

3,892 2,464

Renewable Energy Projects -

Existing Areas

2018 (Limasawa)

2020 (Sabtang; Itbayat;

Calayan; Palumbanes; Gigantes;

Mariripi; Guintarcan; San

2019 (Balicasag; Cuaming)

2021 (Sitangkai; Sacol; Jomalig;

Banton)

2022 (Conception; Tagapul-an;

Balimbing; Tandubas)

2023 (Manuk-Mangkaw; Balut;

Hikdop; Palanan- Isabela)

2024 (Balabac; Agutaya;

Cagayancillo; Araceli)

Proposed Solar

PV Capacity

(kW)

Estimated

Project (MnP)

352 138.29

1,357 535.77

203 87.94

200 85.56

TOTAL 2,112 847.56

2022 (C. P. Garcia; Iloilo)

Note: PV capacities are subject to adjustment based on actual site conditions and project costings are

for budgetary estimate purposes only.

Renewable Energy Projects - New Areas

2019 (9 Areas in Burdeos; Siruma; Taytay;

Hinunangan)2020 (35 Areas in Calayan; Busuanga; Tabuan

Lasa; Gasan; Taytay; Balabac; Roxas; Bataraza;

Linapacan; Agutaya; Cuyo; Magsaysay; Araceli;

Dumaran; Jetafe; Guimaras; Nueva Valencia;

Sagay; Akbar)

2021 (Leyte; C. P. Garcia; Talibon; Guimaras)

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www.napocor.gov.ph