It’s Time to Embrace a New Design Philosophy in the Power Distribution Sector

It’s been two months since Typhoon Odette (international name Rai) devastated large parts of Visayas and Mindanao. Sadly, many families are still living in the dark as power has not been restored in their communities.

Time and time again, natural calamities like Typhoon Odette show us how ill-designed our infrastructure is and how poorly prepared our power sector leadership is in handling power outages and restoration. 

As we saw with the disaster response in Typhoon Odette, our government was unable to respond timely mainly because we rely on a centralized power system supported by a transmission and distribution infrastructure designed over a century ago.

Resiliency has always been a challenge in the power sector. Whenever a typhoon damages the poles of the distribution system, there is no other option but for unaffected utilities to send teams to help restore the lines. The Bayanihan Spirit is laudable, but this approach faces many challenges.

For one, just think of the logistics involved in this approach. Volunteer teams need to bring their own vehicles, equipment, food supplies, etc. It’s also quite challenging for these volunteers given that affected areas are usually without food and water.

We also have to take into account that the transmission company, the National Grid Corporation of the Philippines (NGCP), also has limited men and equipment to repair damaged lines and towers. 

In the past, the National Power Corporation (NAPOCOR) could mobilize temporary generator sets or even power barges to supply emergency electricity. However, these days, it is unclear who should assume the role of providing emergency sets.

The media has reported that the Energy Regulatory Commission (ERC) cannot allow NGCP to run emergency gensets because that will counter the Electric Power Industry Reform Act’s (EPIRA) intent. As NGCP is prohibited from putting up emergency generators, it is up to the generators to provide emergency power supply, which they will have to sell to the distribution utilities (DUs) or electric cooperatives (ECs).

Sadly, this setup is far from ideal since DUs and ECs have to conduct bidding, award and sign the contract, and seek the approval of the ERC. Unless the Department of Energy (DOE) gives an exemption to the utilities, the entire process of procuring an emergency power supply will take many months.

There is something wrong with this setup. Keep in mind that consumers actually do pay for this “emergency supply” via the ancillary services charged by NGCP. This capacity charge is under the “Reserves” item in everyone’s electricity bill. By this alone, NGCP should be the one to provide this service. Since it obviously could not dispatch the generators, bringing in mobile gensets is a simple extension of that function. 

Think about it. Consumers are being short-changed since NGCP is already relieved of the responsibility of providing emergency power that consumers are paying for. The legal definition of NGCP’s function is placing consumers at a real disadvantage. Some power sector luminaries reported that Congress has to pass a resolution to allow NGCP to provide emergency power supply for an extended period. In the meantime, people are dying of hunger and disease while local government units (LGUs) deal with these bureaucratic processes and legalities.  

Infrastructure and utilities damage caused byTyphoon Odette in Cebu City last December. Photo c/o of http://www.rappler.com

We can draw several conclusions from our experience with Typhoon Odette.

First is that the current design of centralized power distribution is no longer responsive to modern times. The effects of climate change are real, which is why we are experiencing more severe weather disturbances. The centralized power distribution model has not changed in a century but the planet has changed significantly in many ways.

Second, is that LGUs have to be involved in the design and implementation of public utilities in their provinces and cities. We cannot afford to simply rely on utility companies to respond to crises as often they are helpless in times of disasters.

There are no short-term remedies to prevent prolonged suffering of Filipinos should another devastation as Typhoon Odette happens. The actions we need to take are long-term solutions.

Recently, President Rodrigo Duterte signed Republic Act 11646 promoting the use of microgrids in unserved and underserved areas. Under the law, microgrid system providers (MGSP) which are natural or juridical persons can provide integrated power generation and distribution services. These MGCPs do not need to secure a franchise from Congress since they are not considered public utility operations.

They, however, are required to seek waivers from existing distribution utilities to provide unserved and underserved areas as well as an authority to operate from the ERC.

The new law is a step in the right direction as microgrids—small grids independent of the traditional grid — have been proven effective in providing reliable power and can make our power systems more disaster resilient. But it’s not enough as we need to take more drastic actions to make our energy system more resilient to disasters.

We must empower LGUs by including them in the energy planning process. LGUs typically are excluded from planning the power distribution infrastructure, which is ironic as they are the first line of defense and responder when a disaster strikes. 

Thus, all LGUs should take to task all local power utilities to redesign their power distribution infrastructure based on a higher level of resiliency; consider possible budgetary allocation from the National Government. The LGUs should determine whether the utilities have considered the human factor in their plans. No current electricity planning tool considers the human element. The LGUs ultimately are answerable to the people. Therefore, planners must consider the human aspect, and only the LGU is competent to do this. 

Likewise, LGUs must have their power distribution franchises. They must be allowed to mobilize power assets without fear of violating the EPIRA. Consider what happened after Typhoon Odette. Many governors were searching for interim generations but their hands were tied since they are not licensed generators. Likewise, generation companies could not bring in genset as well as that would still require bidding and approval from the ERC. The lack of power after massive devastation paralyzes the local government’s disaster response.

In contrast, allowing LGU to have their franchises will give them the flexibility to design and have a private concessionaire build the microgrid. Further, the local government can mobilize its resources in emergencies without waiting for the local utilities to act. 

Plus, it should be mandated that local barangays are provided electricity locally from solar plus battery systems, or other forms of Distributed Energy Resources( DERs), especially for disaster-prone areas. I have been saying again and again that the century-old design of having a central power plant and the electricity transported through high voltage transmission lines and then brought to the household level is no longer resilient enough for today’s environment. 

Also, the NGCP has recently warned of a possible red alert, leading to  rotational power interruptions in Luzon during the summer season when several coal-fired plants experience an unplanned outage. The grid operator says it foresees higher demand than actual peak load in Luzon from April to June. The Visayas, on the other hand, could go on yellow alerts.

We often receive warnings like these from NGCP and every time we resort to bandage solutions. We need to think long-term and seriously accept the fact that centralized systems no longer work for us. We need flexibility in our energy system which DERs can provide. When we have DERs, we won’t be at the mercy of these coal plants and won’t have to endure rotating brownouts

Saying that microgrids are too costly just won’t cut it anymore. Technological advancements in renewable energy like solar and wind have brought down costs significantly. Battery technologies meant to complement the intermittency of solar and wind have also brought down storage prices. Together, these technologies can provide baseload power at prices close, if not at par, with conventional baseload power. These Distributed Energy Resources (DERs) make microgrids technically and financially viable.

Of course, aside from cost considerations, we also have to realize that microgrids make us more resilient. Because the microgrid is no longer dependent on the vulnerable NGCP lines, it can immediately have electricity back because households can draw energy from the batteries. 

Likewise, homes and small and medium enterprises (SMEs) can invest in rooftop solar to provide their own power needs and sell to neighbors and friends. Microgrids are not only resilient but can socially make a locality economically vibrant.

It’s not only the unserved and underserved areas that must have distributed energy resources as LGUs must have their power distribution franchises. The LGUs role in disaster response can never be stressed enough. And this is why these LGUs must take a more active part in energy planning and be granted their franchises as well. 

 It’s time to embrace a new design philosophy in the power distribution sector. Doing so will require massive changes but they will be worth it.

2 thoughts on “It’s Time to Embrace a New Design Philosophy in the Power Distribution Sector

  1. Guido, Who should be reading your comments and recommendations, to mobilize your
    suggestions to action? The LGUs for sure.At least the larger LGUs who probably have the financial capabilities to establish, or enter into joint ventures for, microgrids.
    You cannot just stop here with this perceptiv article, Guido. . Do something more, like talking to Governor Dax Cua, president of Union of Local Authorities of the Philippines (ULAP).
    Brod. Santi Dumlao/Vanguard 53

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  2. It’s about time to revisit the existing franchises of existing power dist utilities and coops. There may be inefficiencies due to low collection, high system losses and cream skimming practices but I guess this will meet a political opposition as we have experienced in the past. The mood is changing. Many LGUs are complaining about rate increases and still the service is not reliable. I agree with you Sir GAAD that the time is ripe for this new design philosophy be explored by the next administration.

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