IN a rare meeting with the media last Thursday, National Grid Corp. of the Philippines hetman Henry “Big Boy” Sy Jr., who chairs NGCP’s parent firm Synergy Grid & Development Philippines Inc., unveiled an interesting plan to develop up to 10 gigawatts (GW) of battery energy storage systems (BESS), which would be strategically placed around the country to stabilize electricity supply. The news reports and some of the various commentaries that have come out about this attention-grabbing proposal — most of which essentially just copied the press release — have, it seems to me, been a little misleading, but even in realistic terms, this is a very good idea.
As one example of a headline that might sow a bit of confusion about what is planned, the Philippine Daily Inquirer story from Friday, Oct. 30, announced “Sy pitches P700-billion plan to reduce PH power costs.” That is not exactly inaccurate, but it is making a lot of assumptions. During the media luncheon (which I was not able to attend in person, due to what I have decided to tell people is having been “accidentally shot by Claudine Longet”), Sy did say that the plan, dubbed “Project Airbag,” could ultimately result in the deployment of 10,000 megawatts (MW) of BESS, and that each 100 MW costs roughly P7 billion, thus P700 billion for the whole thing.
As for the reduction in power costs, I did not see where Sy emphasized that aspect of the whole thing, nor did I get that impression from the after-action reports that I got from several people who were in attendance. Indeed, if “Project Airbag” goes forward as envisioned, it is quite possible, and perhaps even likely that it would reduce high electricity rates for consumers to some degree. But that is not the main point of the initiative; rather, it is intended to more efficiently distribute power that already exists, and provide a stronger reserve buffer to reduce or eliminate the problems that result in red and yellow power alerts, such as have been suffered by the Visayas for months.
Remember, transmission charges are a rather modest component of one’s monthly electric bill, only amounting to between 9 and 10 percent of the total. If NGCP is able to deploy a system that substantially reduces the costs it must pass on to consumers — and Project Airbag certainly can do that — that will result in correspondingly modest savings for customers. Still very welcome, of course, but only a partial solution to our uncompetitively high energy costs.
And as far as the “10,000 MW” suggestion, that’s an aspiration at this point; the actual plan for the next couple of years, at least, is sensibly more down-to-earth and attainable, involving 850 MW of BESS facilities already in development (three each in Luzon and the Visayas) and potentially available — pending regulatory approval — within a matter of months, with another 1,000 MW at 12 more sites undergoing study. What NGCP seems to be saying is that, if the kinks in development and approval processes can be worked out in the development of these initial projects, then the program could continue, up to 10,000 MW.
I regret not having had the chance to ask where the name “Project Airbag” came from, because it is quite a colorful description. If I had to guess, I would say that it reflects the project’s potential to cushion the energy system from sudden shocks. On the other hand, it might be a sly reference to the current secretary of the Department of Energy (DOE). That would certainly be the case if I were in charge; but perhaps I should not ascribe that sort of acerbic perspective to entities that still have the frustrating task of trying to figure out how to work with her.
Without wading too deeply into the complex details of grid management, these are the obvious advantages of Project Airbag. First, NGCP, as the system operator, needs to be able to access reserve power — which falls under the catch-all description “ancillary services,” or AS — in order to maintain its stability. That means supply that can be called upon immediately to make up for a sudden deficit, such as might be caused by a plant suddenly going off-line; and additional supply that can be used to maintain the correct voltage and frequency in the system. Under the current system, NGCP has to contract with generation firms for AS, which is not an ideal situation; I discussed this in my column back on Sept. 6 (“On ancillary services”), but to make a long story short, the current arrangement often results in NGCP not being able to secure all the reserve power it needs, and what it can is often at inflated rates.
Having its own AS resources at hand in the form of BESS installations obviates that entire problem for NGCP. And having multiple BESS installations avoids their biggest handicap, which is that fully charged BESS systems only have a few hours’ duration when discharging; by rotating which ones are in use, NGCP can keep reserves available 24 hours.
Second, and what to me seems like the most wonderful thing about the Project Airbag proposal, is that it provides a solution for the variability of solar power. Solar energy tends to be most abundant during the hours of the day when it is actually least needed, which results in much of it being wasted, and what is used is sold at rock-bottom prices. NGCP’s battery banks can soak this up — at lower cost than power from conventional generators, but at a cost that still makes it worthwhile for net-metering — which should encourage further expansion of rooftop solar.
As NGCP has pointed out, its Project Airbag is not a substitute solution for the fundamental problem of the country’s deficit of reliable generation capacity. It is, however, an excellent solution for using the available resources more efficiently, and yes, it will eventually lower costs; perhaps not so much directly, but in helping consumers and businesses to avoid the costs of unstable and insufficient power supplies.
Naturally, there is always another shoe to drop, and it remains to be seen what that is, exactly, that will pose obstacles to carrying out the Project Airbag plan. I am still working through the risk analysis of possible hurdles (as I have been trained to do), and will share my thoughts on those later, but as an initial impression, I think the three biggest potential pitfalls, in order of likelihood, are policy hurdles from the Sharon Garin-led DOE, where “blame NGCP for every failure of energy reliability while simultaneously undermining its ability to address the problem” is standard operating procedure; engineering and technical hurdles in NGCP’s acquiring the necessary equipment; and possible regulatory hurdles from the Energy Regulatory Commission (ERC), not because the ERC wants to handicap NGCP, but because it is constrained by sometimes unhelpful laws. More on all of this later.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
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