A Stronger Case for Distributed Energy

Apart from disaster resilience, the country will do well in welcoming more distributed energy systems because of other benefits. Photo c/o http://www.advisian.com

Time and time again, thousands of Filipinos are left in the darkness after destructive typhoons hit us.

Just a few weeks ago, Tropical Depression Auring left some residents of Surigao del Norte and Davao Oriental without electricity although the outages didn’t last that long. Auring, after all, was merely classified as a Tropical Depression and didn’t wreck as much havoc as the three typhoons that we experienced last year.

In the last quarter of 2020, Typhoon Quinta, Super Typhoon Rolly, and Typhoon Ulysses battered the country, leaving massive destruction and causing major power outages. The Bicol Region suffered a total power blackout due to these typhoons. 

According to the National Electrification Administration (NEA), the country suffered some Php500 million worth of damages to the utility system because of these three typhoons.

It’s a given that the Philippines will always suffer from catastrophic typhoons given its location. On average, the country is visited by at least 20 typhoons annually, five of which are destructive. We can’t change our location but we can invest in resiliency measures.

 For the Energy Sector, this means revisiting our energy systems, and reinvesting in distributed energy and smart grids

As I have mentioned in a previous post, many countries are already moving away from traditional central power production and are moving toward distributed energy production. The Philippines must follow suit as distributed energy will bring many benefits to Filipinos.

Disaster resilience is one benefit. Our current centralized systems require power lines spanning long distances, which proves detrimental for us when natural disasters happen. Damage to a single line can leave thousands without electricity, which is why it’s hard to restore power immediately. Power distributors, cooperatives, and the transmission company will first have to assess which lines are damaged and affected. Only then can linemen start physically restoring power. Power restoration after a calamity is risky and sometimes results in the deaths of some linemen.

Apart from disaster resilience, the country will do well in welcoming more distributed energy systems because of other benefits.

A recent study in the United States conducted by Vibrant Clean Energy found out that investing in local solar and wind energy, storage, and distributed energy technologies can save the US some $473 billion in power bills from now and year 2050. This amount of savings the research said is feasible if the US invests heavily and uses solar and wind power and distributed energy to power businesses, farms, homes, and schools.

The research also revealed that investments in distributed energy and other technologies that can power 25 percent of US homes are the most efficient way of meeting the country’s climate goals while generating 2 million jobs along the way. And as I have discussed above distributed energy can also help boost the resilience of communities that are dealing with wildly variant weather patterns.

Speaking of farms renewables and distributed energy can also help our agricultural sector.

Recently the Department of Agriculture (DA) and the Department of Energy (DOE) announced that they will jointly undertake pilot renewable energy (RE) projects for the agriculture and fishery sectors in strategic areas of the country. The goal is to promote the use of clean energy in boosting food security. 

Some of the pilot RE projects will include off-grid electrification in corn, rice, and sugar cane farms and the use of solar-powered systems for aquaponics, hydroponics, crop irrigation, and poultry egg incubators and hatchers. The pilot projects will help jumpstart the Renewable Energy Program for the Agriculture and Fishery Sector (REPAFS).

The REPAFS will eventually serve as the blueprint for efficiently and effectively integrating renewables in the agriculture and fishery sector to enhance productivity and ensure sustainability and environmental protection.

The REPAFs will benefit from distributed energy and renewables. Areas that heavily rely on variable energy resources such as wind and solar are better off investing in distributed energy systems as renewable power can be deployed to help balance the grid and improve system reliability.

In this regard we are looking at off-grid solar with battery solutions to be implemented in such areas. One system we are seriously looking into will allow almost a 24-hour electrical source to power  a TV, radio, and a set of lights. And the system will cost below what it currently costs NPC to provide electricity to SPUG areas. We are also exploring collaboration with Land Bank of the Philippines (LBP) to provide the financing needed for the farmers and fishermen.

Distributed energy can also help power rates become more affordable as consumers can sell back power to the grid or receive compensation for allowing the use of their storage systems to help stabilize the grid.

Plus, distributed generation can help breakdown monopolies in power distribution. A study by the Massachusetts Institute of Technology (MIT) entitled, “Utility of the Future” noted that present electricity distribution systems create a natural monopoly as regulators tend to be clueless about the distribution utilities’ managerial inefficiencies and costs. This in turn allows DUs to justify their higher operating and convince regulators to pass the additional costs to consumers.

Distributed energy systems work differently as they bank on other advanced technologies such as advanced metering, energy management systems, and dynamic-based pricing, all of which offer more transparency on pricing.

The transmission and distribution businesses were once conceded as natural monopolies, but technological changes proved that transmission and distribution need not be dominated by a single or few players. 

The transmission and distribution businesses were once conceded as natural monopolies, but technological changes proved that transmission and distribution need not be dominated by a single or few players. Around the world, the energy sector is undergoing massive changes given the many technological advancements and the need to address climate change. It’s high time the Philippines joins other countries that are moving away from centralized distribution as Filipinos will benefit more from distributed energy.

Redouble Efforts to Address Doubled Threats

A recent study revealed that the number of intense floods and storms could double within 13 years due to rising carbon dioxide worldwide, threatening the environment and the world’s socio-economic progress. In particular, the results showed that floods and storms are likely to increase by nine percent for every one percent rise in the carbon dioxide level.

The research, entitled “Impacts of Carbon Dioxide Emissions on Global Intense Hydrometeorological Disasters” used climate data from 155 countries, collected over 46 years from 1970 to 2016. The study concluded that the continuous increase in atmospheric carbon dioxide in the last 40 years was significantly correlated with the rise of extreme disasters.

The research also stressed that the Philippines could face more devastating natural disasters, particularly storms and typhoons. This is because the country faced roughly nine extreme hydrometeorogical disasters yearly, significantly higher when compared to the single disaster per year of other countries.

One of the authors of the study, Vinod Thomas, as quoted in an article in The Inquirer, warned that “One more extreme event in the Philippines, for example, one more Supertyphoon ‘Yolanda’, Typhoon ‘Pablo’ or Tropical Storm ‘Ondoy’ (Ketsana), would strain the country’s ability to cope.” The strain on the country’s infrastructure can be severe. We need to re-think on our resiliency strategies given this inevitable fact.

The authors concluded that the world needs more investments in disaster risk reduction and mitigation and the Philippines has to redouble its efforts in climate change adaptation. “But all the adaptation in the world will not be enough if we do not mitigate…The Philippines has to cut back on the use of coal and fossil fuels, and go all out for wind and solar power.”

This recently released study isn’t the first to call for more action on climate change mitigation and adaptation measures. We have all been at the receiving end of warnings telling us to limit carbon dioxide emissions by shifting to cleaner power or we’ll all suffer the wrath of natural disasters.

For example, David Eckstein, a Germanwatch policy advisor on climate finance and investments, has previously warned that “Countries like Haiti, Philippines, and Pakistan are repeatedly hit by extreme weather events and have no time to fully recover. That underlines the importance of reliable financial support mechanisms for poor countries like these not only in climate change adaptation but also for dealing with climate-induced loss and damage.” 

typhoon c:o reuters

Countries like the Philippines are repeatedly hit by extreme weather events and have no time to fully recover says David Eckstein, a Germanwatch policy advisor on climate finance and investments. Photo c/o Reuters

Yet, despite these dire warnings, coal remains the king of our local power mix. In 2018, coal made up 52.05 of our energy mix. On the other hand, renewable energy only contributed less than a fourth at 22.7 percent. This figure isn’t likely to improve since 80 percent of the committed energy projects are still coal power plants as a Greenpeace noted in a report. Naysayers will point out that any contribution in RE from the Philippines will amount to nothing. I think that view is very shortsighted. The sooner that we, as a country, learn the ways of sustainable energy, the better it is for our children and their children.

Our country needs to do its share in limiting the world’s carbon dioxide level. The Philippines is one of the countries that suffer the most from extreme weather events. Thus, we need to rely more on renewable power than coal. 

Paving the way for renewables to flourish in our country requires additional infrastructure, particularly, smart grids and distributed energy resource. Let us remember, that these two are key technologies in renewable energy development. 

It is also imperative for us to beef up on our energy resilience With all the warnings that the Philippines is one of the countries that suffer and will suffer most from extreme weather events. We need to put our money in putting up distributed generation systems and smart grids while we work harder on climate change mitigation and adaptation measures.

And we can make this shift if we also invest in smart grid and distributed energy. These two are key technologies in renewable energy development. 

The smart grid offers an electric power system capable of integrating the actions of all users from the power generators to users. This means integrations of higher levels of renewable energy is possible with smart grids, unlike the rigid and inflexible grids. Distributed Energy Resources or DERs, on the other hand, allow are small-scaled power generation or storage technologies that offer an alternative to the traditional electric power system. It allows for power generation near where electricity will be used. 

Plus, smart grids and DERs help in making our country more resilient to the impact of natural disasters. Let’s remember that power loss is rampant after we get hit by typhoons given our centralized energy system requires long power lines to deliver electricity. Weather disturbances often compromise power lines simultaneously, leaving thousands of countrymen without electricity. Thus, having smart grids and DERs will help decentralize power production where only a few will suffer power loss after disaster strikes.

As we rally for a greater share of renewable power in our energy mix, we should also invest more in smart grids and distributed energy. Replacing coal with renewable power while slowly moving away from the traditional way of transmission and distribution is key to fighting climate change and increasing our energy resilience.


PH faces disasters ‘others haven’t seen’

Towards A More Distributed Energy Future

Recently, the Department of Energy (DOE) has announced that it is finalizing the rules on distributed and small scale scale renewable energy projects in off-grid areas in the country. While this should have been done years ago, at least distributed generation is getting its fair share of attention. And the circular should go beyond just generation, it should now allow local groups or communities to establish, for themselves, a distributed energy platform. I have discussed this in another blog where I emphasized the realities of the 21st century in power distribution.

The draft circular entitled “Guidelines Governing the Development, Registration and Administration of Distributed, Small-Grid Renewable Energy Projects and Facilities” aims to promote the development and utilization of Renewable Energy (RE) resources in isolated or off-grid areas through qualified RE developers.

The DOE stresses that the guidelines are in line with the government’s efforts to achieve 100 percent electrification in the country. The Energy Department added that the new guidelines will also help in expanding Distributed Energy Resources (DER) and Distributed Generation (DG) in the country. The former refers to any technology that allows those with distributed generation facilities to be sold back to the grid as permitted by regulators while the latter is  any technology that produces energy outside of the grid. The challenge here, of course, is how much will the “grid” purchase the generated power?  This poses the same problem as “net metering” where power distributors undercut the rooftop solar owners by paying them only the “average” power generation rate.  As solar produces only during the day, the power distributors get an arbitrage by buying low during peak hours.

Under the draft circular, RE developers must apply and register their small-grid facilities of not more than one megawatt capacity. Again, limiting it to 1 megawatt does not make sense.  The whole idea of distributed generation does not imply limits in generation. Hopefully the DOE will see this flaw and amend the circular.

Admittedly, the new guidelines are a welcome development as DGs and DERs are helpful in achieving 100 percent electrification rate for countries, especially those that are archipelagic such as the Philippines. I hope, however, the DOE will push the envelope even further.

DER technologies, which consist of mostly energy generation and storage systems such as batteries and flywheels that are located near the end users are becoming rampant.  Around the world, power systems are moving away from centralized distribution as energy mixes are now integrating DERs,  according to a study of the Massachusetts Institute of Technology (MIT) entitled, “Utility of the Future”. This means that the traditional model of distribution where consumers source energy from a single utility with the help of main transmission lines are slowly being replaced by DERs.

The growth of DERs is due to a variety of factors, the MIT study says. For one, more nations are shifting away from traditional sources of power and are adding more renewable sources into their energy mix. The study notes that the growth of renewable energy is happening partly due to and in parallel with the world’s focus on decarbonizing power systems to combat climate change. As such, many advanced nations are leveraging DERs technologies to distribute cleaner power to decarbonize their countries.

DER system

Around the world, power systems are moving away from centralized distribution as energy mixes are now integrating DERs. Photo c/o of Siemens.com

Welcoming DERs bodes well for the Philippines. The main benefit of DERs is that its distributed nature allows for cheaper, more effective energy distribution services, especially for those without access to centralized resources such as our off-grid islands. 

Renewable energy and DERs mean cheaper power for off-grid areas especially in the Philippines. Various studies have stressed the importance of renewables in achieving electrification at cheaper costs for the country. 

For example, the study entitled, “Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids,” noted that there’s roughly Php10 billion in savings if the Philippines rely on RE instead of traditional sources of power for off-grid areas or missionary areas. “Small island grids powered by solar, wind, and other renewable energy could reduce dependence on expensively imported fossil fuel generation without compromising the availability of power and grid reliability,” the reported noted.

According to the DOE the Philippines’ electrification rate is at 89 percent. There are still around three million Filipino homes without electricity as of the end of 2018. These DERs then would be helpful in providing stable power to these households.

Aside from helping the off-grid areas achieve electrification, there are still many benefits in integrating DERs in our power system even in on-grid areas. This is because as the MIT study stressed, DERs help competition flourish in the energy sector given. After all, these technologies are changing the way electricity service delivery by altering the use and management of distribution systems. 

The MIT report stressed that current electricity distribution systems create a natural monopoly since regulators are blind to the distribution utilities’ actual cost and managerial efficiencies. This creates an opportunity for distribution utilities to increase their profit by merely convincing regulators that they have higher operating costs than they actually do, which is then passed on to consumers. 

The same cannot be said of DERs along with other technological advancements and mechanisms in the energy sector such as dynamic-based prices, advanced metering and energy management systems. These all require efficient price signal and information control systems.

Indeed, moving to a distributed energy system has many advantages. But changes in regulations must take place, too. Our Energy Department and regulators by this time should be rolling up their sleeves and getting ready to work for a more distributed energy system in the country for the benefit of the Filipino consumers.



Utility of the Future by Massachusetts Institute of Technology