As one of the fastest growing economies in Asia, the Philippines has witnessed a consistent increase in power demand over the years. As per the Network Development Plan [NDP] 2019-40, the projections for future demand point to an expected average annual compound growth rate (AACGR) of around 5.6 per cent for the forecast period. Thus, providing a reliable, efficient and technically superior transmission network can ensure a sustainable, environmentally conscious supply of electricity, synchronously minimising losses and costs.
The country’s transmission network is operated by a private concessionaire, the National Grid Corporation of the Philippines (NGCP), owned by a consortium led by the State Grid Corporation of China. In 2009, the NGCP was awarded a 25-year concession to operate and develop the country’s entire transmission network. The NGCP’s transmission system network consists of 500 kV, 350 kV high voltage direct current (HVDC), 230 kV, 138 kV, 115 kV and 69 kV high voltage lines and cables. As the sole transmission service provider, the NGCP plays a vital role in the safe and reliable transmission of electricity in response to system requirements and market demands in the three major regions of the Philippines – Luzon, the Visayas and Mindanao.
The Department of Energy (DOE) predicts peak demand for electricity in Luzon to grow by 4.78 per cent annually from 2016 to 2040 – from 9,726 MW in 2016 to 14,501 MW in 2025, and reaching 29,852 MW by 2040.
Growth in transmission
As of June 2018, the Philippines’ transmission network comprised 21,181 circuit km of lines and 33,485 MVA of transformer capacity. In 2018, Luzon accounted for 46 per cent of the total circuit line length, Mindanao for 29 per cent and the Visayas region for 24 per cent. Further, the islands of Luzon and Visayas are interlinked via six major undersea interconnection systems – the ±350 kV direct current (DC) Leyte-Luzon, the 230 kV Leyte-Cebu, the 138 kV Negros-Panay, the 138 kV Cebu-Negros, the 138 kV Cebu-Lapu-Lapu and the 69 kV Boracay-Panay interconnections. However, Mindanao island continues to operate in isolation.
During 2018, the NGCP added 332 circuit km of new transmission lines. However, the substation capacity decreased from 34,007 MVA in 2017 to 33,485 MVA in 2018 due to decommissioning of transformers in line with the NGCP’s transformer replacement programme. Capacitor banks and shunt reactors were also installed in appropriate locations in different parts of the grid.
Six main grid projects were completed and energised by the NGCP in 2018. Of these, 74 circuit km located in Luzon, 134.7 circuit km in Visayas and 173 circuit km in Mindanao. The 69 kV Eastern Albay transmission line and the 230 kV Bataan reinforcement works were some of the key projects commissioned by 2018 in the Luzon region. In Visayas, the Eastern Panay transmission line project was implemented to accommodate the entry of the 2×135 MW coal plant of the Palm Concepcion Power Corporation in Concepcion in Panay. The 138 kV Aurora-Polanco transmission line and the 138 kV Manolo Fortich switchyard project were the major projects completed in 2018 in Mindanao.
Over the past years, the NGCP has implemented several smart grid initiatives including the upgrade of the supervisory control and data acquisition-energy management system (SCADA-EMS); establishment of the overall command centre; implementation of microprocessor-based substation control (MBSC), time synchronisation devices and transient fault recorders in major substations; and a holistic cybersecurity enhancement programme.
Despite the grid initiatives, the quality and strength of the grid within the Philippines is subject to significant regional variation. The Visayas region witnessed the highest AACGR for electricity consumption at 6.13 per cent for the period 2006-16. The Luzon grid posted an AACGR of 3.73 per cent, while the Mindanao grid marked an AACGR of 3.62 per cent for the same period. Luzon, representing around 73 per cent of total load requirements within the Philippines, has been the focus of grid infrastructure improvements.
Grid expansion plan
Given the growing demand for electricity and the need to provide a reliable and efficient power supply, the NGCP released the NDP 2019-40 in 2019. The plan outlines a strategy to further revamp the existing grid network and envisages continuous expansion of the Philippine grid to meet its objectives of a strengthened, reliable and efficient transmission network.
Given the indispensability of sustainable actions, especially with the growing recognition of climate change, several measures have been planned to reduce dependence on fossil fuels, concomitantly insulating the country’s exposure to price fluctuations and increasing the utilisation and development of renewable energy resources. The NDP envisages the renewable energy capacity to increase to at least 20,000 MW by 2040.
Generation projects aggregating 38.4 GW of capacity are being planned for development. Of this, 30 GW will be in Luzon, 5 GW in the Visayas and 3.4 MW in Mindanao. Of the total future capacity, 6,400 MW is committed while the remaining 32 GW is indicative (projects that are yet to submit a grid connection application to the NGCP). The Majority of the future capacity addition comprises coal-based projects (36 per cent), followed by solar projects (26 per cent), natural gas-based projects (13 per cent) and hydro-based projects (12 per cent). The country also plans to add around 2.8 GW of wind capacity.
Grid reinforcement to support this new generation capacity has been recognised as a crucial focus area. To support the entry of new generating facilities and to allow market competition, the NGCP plans to upgrade and expand transmission backbones.
Luzon
In Luzon, the NGCP’s focus is on strengthening the transmission system and improving reliability and resilience through extensions of the existing 500 kV transmission backbone from around the main load centre of Metro Manila and into the generation heartlands of Western Luzon and Batangas. The identified generation hubs in the Luzon grid are the provinces of Batangas, Quezon, the Bataan Peninsula and Zambales. The NGCP is planning to undertake a looping of the 230 kV Northern Luzon backbone, which evacuates power generated by hydro assets in the region and the Burgos wind projects on the northern tip of the island. Meanwhile, the 500 kV Pagbilao-Tayabas transmission line project will accommodate an additional 1,200 MW from the coal generation capacity in Quezon province. The proposed Northern Luzon 230 kV loop will serve the wind potential in north Luzon. To further strengthen the reliability of power transmission to Metro Manila, new transmission corridors will be developed in Metro Manila such as the 500 kV Santiago-Nagsaag transmission line, the 500 kV Silang-Taguig transmission line, the 230 kV Taguig-Taytay transmission line, the 230 kV Navotas-Pasay transmission line and the 230 kV Navotas-Doña Imelda transmission line.
Visayas
In the Visayas, the NGCP is focused on alleviating grid constraints due to excess capacity from the raft of coal-fired and solar generation projects that came online during 2016 and to allow for further projects to enter the system. Cebu and Panay are the main sites for large generation capacity additions, specifically for coal-fired power plants. The plan envisages the advancement of the 230 kV Cebu-Negros-Panay Backbone Project and the 230 kV Negros-Panay interconnection line 2 project, which aim to ensure the effective transmission of excess power generation from Panay towards Negros. It is also proposed to energise the 138 kV Panay-Guimaras interconnection to ensure the full dispatch of power from the San Lorenzo wind plant and other prospective generators in the area.
Mindanao
In Mindanao, which has experienced sustained supply deficits in the past, the NGCP has largely been concerned with transmission projects that facilitate the entry and full utilisation of new generation capacity, particularly of new coal-fired plants such as Therma South, FDC Misamis, SMC Malita and GNPower Kauswagan. The 230 kV Mindanao backbone project, expected to be completed in 2019, entails the construction of transmission facilities along the northern and southern corridors of Mindanao. It will help accommodate capacity from new power plants and allow existing power plants to dispatch power at their respective maximum capacities for transmission throughout Mindanao. To meet load growth and improve system reliability in concerned areas, key planned transmission projects include the 230 kV Malita-Matanao transmission line project, the 230 kV Baloi-Kauswagan-Aurora transmission line project, the 69 kV Maco-Apokon transmission line project, the 230 kV Villanueva-Butuan transmission line, and the Mindanao substation expansion project.
Unified grid
Another priority of the NGCP is increased interconnectivity among the major grids. As the Luzon and the Visayas grids are already interconnected, connecting the Visayas and Mindanao grids will create a more open, liberalised and competitive market as Mindanao-based industry players can participate freely in the wholesale electricity spot market. The Luzon-Visayas HVDC bipolar project is planned to accommodate additional generation. The Mindanao-Visayas Interconnection Project (MVIP), the first project to be declared an Energy Project with National Significance, is expected to be completed by 2020. The MVIP is considered to be the biggest power infrastructure project in the history of the country. The project aims to connect the Mindanao grid to the Visayas grid and will ultimately lead to a single, unified national grid. Under the project, a 277 km HVDC cable (comprising undersea and overhead sections) will link New Aurora in Mindanao to Sibonga in Visayas.
The Batangas-Mindoro interconnection, the Leyte-Luzon alternating current interconnection project and the small island interconnection projects are some other projects planned to help create an interconnected Philippine grid.
Cross-country projects
The creation of a regional power grid linking the member countries of the Association of Southeast Asian Nations is being planned. Under this, there are plans to link the Philippine grid with Sabah in Malaysia. The line will traverse the islands of Palawan and Mindoro and the proposed interconnection point is at the 500 kV Ilijan substation in the Luzon grid.
Smart grid and other initiatives
The NGCP has already employed SCADA systems for the safe and secure operation of the Philippine grid and to ensure compliance with technical and regulatory requirements. The NGCP plans to build transmission infrastructure so as to integrate new technological systems and an efficient renewable energy mix into the grid.
A synchronous system can help provide a well-developed telecom network, accurate billing information, and efficient data monitoring and recording. Given the pivotal role of a unified synchronised system, the installation of synchronisation clocks at all substations is expected to be completed by 2020. Such need for synchronisation is especially relevant as the NGCP prepares to establish a smart grid.
Another project, the fibre optic network expansion initiative, entails installing optical fibre links on new transmission lines as well as optical ground wire retrofitting on existing transmission lines. This project envisages the expansion of the fibre optic network to 24,934 km by 2040 from the existing 6,365 km.
In addition, with the DOE’s initiative on the adoption of resiliency policy for the energy industry, the NGCP has identified and proposed risk-reduction programmes to ensure the reliable operation of the grid during times of disastrous events.
Challenges and the way forward
Several roadblocks are currently stalling the grid development process. Further, in the Philippines, the long wait by the NGCP for the Energy Regulatory Commission’s approval for key projects is likely to inhibit investment in transmission, which could lead to congestion and, ultimately, higher costs for consumers. Several right-of-way breaches also affect the quality of the grid operator’s transmission services. The NGCP is seeking recommendations for the Anti-Power Line Disturbance Act to handle this issue. As per the NGCP, the proposed measure will help prevent obstructions and penalise the introduction of high-growing vegetation or hazardous improvements along power line corridors. Laws such as the Senate Bill No. 2098, and the Anti-Obstruction of Power Lines Act of 2018 will act as a deterrent to the public from breaching the required clearance around power transmission lines. With respect to regional interconnections, utilities face geographical and technical challenges, which are further exacerbated by the differences in the electric power industry structure that may hamper government-to-government cooperation.
The NGCP’s planned grid expansion offers great potential benefits of efficiency by increasing access to low-cost generation, improving reliability and mitigating market power. Addressing issues that can potentially impede grid development can provide a much-needed fillip to the Philippine transmission network, concomitantly fulfilling the demand for an environmentally friendly energy source.
