Dreaming Realistic Options to Inter-Island Power Grid Links – Archipelagic Power Strategy for an Archipelagic Country

David Celestra Tan, MSK

5 March 2017

The Philippines has 7,017 islands with 20 major ones. Luzon, Most of Visayas, and soon Mindanao are connected to the main grid. Big islands likePalawan, Mindoro, Masbate, Marinduque, Romblon, Catanduanes, Bantayan Island, Siquijor, and Basilan are the major islands not connected to the national grid and they take up P10 billion a year in missionary subsidy.The true cost of generation is about P10 per kwh compared to an average of P5.00 per kwh on the grid.

Yet, the quality of power supply continue to be unsatisfactory and slow in coming.

First Things First

 Many ideas for more submarine cables to connect big islands like Mindoro to Luzon, Mindanao to the Visayas, Sabah to Palawan and Palawan to Luzon are being floated. To make sensible decisions on these expensive connections, a national strategy decision has to be made first on the role of the inter-island power grid links. Are they for the purpose of being the main source of power or only to share supplementary supply resources among the islands?

Inter-island link as main source of supply

 If the submarine inter-island grid is intended to be the main source of power to the island it means there is no intention to build cost effective main supply on the island itself.  It means centralizing power generation and bringing them to these islands by submarine cable. It also means the submarine cables will be much bigger in capacity, probably 138 and 230kv.

We are an archipelagic country trying to configure our national grid as if we are one homogenous country like the western countries that we seem to be copying. Centralized generation is so old and ignores the trend towards smaller generation and renewable energy that also tend to be smaller. The drop in savings from larger and larger power plants, the increased cost and geographical constraints of building more and more high voltage transmission lines, and  the dropping cost of smaller generation technologies have combined to this trend.

 Inter-island links for sharing of supplementary resources

 This means the inter-island connection is only being built for the purpose of sharing the power generation resources of one island with another for supplementary peaking and reserve power and even intermediate or mid-merit needs.

This means the main source of power of each island will still be on the island itself and not imported. Consequently, the submarine connection is for lower capacity of 69KV and in some cases maybe even 34.5kv. There is a quantum leap in costs of 138 and 230kv submarine power systems which require gas insulated cables and technology compared to only basic insulation and auxiliary systems for 69kv. In the proposed Mindoro to Batangas connection the 230kv line was estimated at P11.9 billion while Napocor estimated the 69KV line at P4 billion.

 Lessons from the Past

 The Napocor monopoly pursued this centralized power generation strategy and linked the Visayas islands in the 1970’s and 80’s with submarine cables to Negros, Panay, Bohol, and Boracay. Main power supplies were centralized in Leyte and Cebu. Consequently Negros, Panay, and Boracay suffered for decades with terrible power quality under this concept. It was only when the private sector built power plants in Iloilo that the power reliability improved in Panay island and Boracay.

 1. On-Island Power Generation and N-1

 For power reliability each island must be self-sufficient in base-load power supply. Some islands are big enough to afford a 65 to 150mw in base-load generator like coal and natural gas. It can be a mix of energy resources like mini-hydro and biomass and small natural gas which is now feasible like what is possible on Negros Island.

 This is in line with the N-1 and even N-2 power development requirement of the Philippine Grid Code. It means even if one or two of the largest generating unit to the island goes out the “N” (normal service) will still be maintained.

The submarine cable is a unit of supply. If it is the main supply of power to an island, if it goes out, will there still be normal power service to the island or there will be brownouts? If we supply Negros island with 200mw of base-load power via submarine cables,everytime that system goes down, will there be 200mw of backup reserve power on the island itself to maintain normal electric service?

 2. Economic Sense of Submarine Inter-island grid connections

Ideas for inter-island grid connections must make economic sense for ultimately it will be the consumers who will pay for it.

 a. The Mindanao-Visayas grid connection

 We can argue that this connection despite its costs can be economical because there is plenty of power supply from Mindanao (2,500mw of coal projects) that can be supplied to the Visayas and Luzon grid. Mindanao also has over built on diesel power plants that were intended only as security in case the Agus and other suppliers fail. Luzon and Visayas can share to Mindanao its excess power during the summers when Agus hydro complex drops 400mw in capacity.

The Mindanao supply can help keep the WESM prices in both Visayas and Luzon within reasonable level.

 1. The Mindoro Connections

 Mindoro island is so big and so close to Luzon that the island has been a favorite target for submarine grid connection. However, the originally proposed P12 billion Batangas to Mindoro connection was apparently designed to carry a 300mw coal supply from Mindoro to Luzon that’s why it was designed for 230kv. The problem was the claimed 300mw coal project in Mindoro was not actually in Mindoro because the DOE had long determined that Mindoro coal is not of sufficient quality. (Whoever tried that stunt?)

 When your consumer group MatuwidnaSingilsaKuryente Consumer Alliance looked into it in 2011, it realized that there were actually three (3) parts to the “Batangas to Mindoro” connection proposal. The 230kv submarine cable connection from Batangas to Calapan Mindoro (25kms), then the 230kv, 300km overhead transmission line from Calapan to San Jose Mindoro Occidental and as disclosed by the electric coop OMECO, the submarine connection from San Jose to Semirara Coal mines.  Apparently the 300mw coal supply mentioned by NGCP to benefit Luzon consumers was not really in Mindoro but in Semiraraisland, 15 kms away. It explains why the project incongruously included a 300KM 230KV line from Calapan to San Jose, a city with only 12mw in demand.

 Building the submarine cable is very expensive and someone has to pay for it and it will most likely be the consumers. The only way to make the cost palatable is to spread the cost over all the Luzon consumers.

 Economically, it does not make sense. Mindoro island currently has 65mw power demand. It grows only at 5% at most per year. In 10 years it will only have 106mw.  Obviously Mindoro island cannot use all that 300mw power so a connection line from Mindoro to Luzon will have to be eventually justified.

 There is a new proposal to build a submarine cable from the mine-mouth coal plant in Semirara to San Jose Occidental Mindoro, a province with only 25mw in demand As far as we know the Phil Grid Code rules that such connection will only be for the use of a Semirara coal project and therefore should be classified as a dedicated connection line that the power generation proponent will have to build himself and pay for it as part of his project cost. Down the road the creative minds will convince “another” power generator to build a plant on Semirara island and hence technically the submarine connection line from Semirara to Mindoro will have to be taken over by NGCP because by then it is “needed to assure competition” since there will be several generator users.  Imaginative. The cost of the expensive submarine cable connections will become part of NGCP transmission charge. And it will be bigger because they will justify building the 300km 230kv overhead line from San Jose to Calapan and then the 25km submarine cable from the Calapan to Batangas. Just like the old proposal in 2011 except this is being pursued in reverse.

 MSK’s question then still remains. Why make the Luzon consumers pay so much for submarine cable costs from Semirara to Batangas when it can buy the 300mw from a Luzon based power project without the big transmission line expense? Why not buy the 300mw from the SemiraraCalaca plant even?

 The Island of Mindoro can need 300mw of power by itself only in the foreseeable future if it is connected by land bridge to Batangas thus justifying migration of industries and more residents to the island. Otherwise it will be only a 100mw island in 10 years.Longer if it grows its normal 3.5%.

 1. The Palawan-Sabah power Link-up

 Another exotic idea being floated is to source “dirt cheap” power from Sabah to Palawan by a 200km submarine cable power link. We agree with writer Ms. Myrna Velasco of the Manila Bulletin that it is “dreaming an impossible dream”.

 A 200km Sabah to Palawan cable link can be economically feasible only if it involves more than 1000mw. It will also involve building a 230kv line the 350km length of Palawan island. The 300km  subsea gas line ofMalampaya became viable because it involved 2,700mw of gas energy. Furthermore, we have to consider the national energy security implications of buying power from a country with whom the Philippines has some history of territorial conflict.

 The main land of Palawan now uses only under 50mw peak demand.Even if it grows at 10% per year, it will only need 130mw in 10 years. And it is not going to maintain that 10% growth by the 7th year.

 Obviously, the 200km Sabah to Palawan link up will not be viable if it is only for the 50mw Palawan. Supposed the Sabah power is 500mw. That power will need to be brought to the larger market of  Luzon. This means building a submarine cable from Palawan to Luzon mostly likely via Mindoro.That will help justify that 230kv overhead line from San Jose Occidental Mindoro and the 25km submarine line from Mindoro to Batangas.

 But it is not that Simple

 Bringing power to Luzon via a Mindoro power link from Semirara or Palawan-Sabah will have to address the congestion in the Batangas transmission line corridor to the load center of Metro-Manila. The cost of building a new 230kv line to Manila will need to be factored in the cost of a Mindoro connection project.

 Talking about what is technically and economically sensible, why not the Philippines consider Bataan as an energy zone and build a shallow Manila bay submarine cable from the Bataan Peninsula to the Metro-Manila and Calabarzonarea? This is a dream worth dreaming.

 Economic Costs and Archipelagic Power Grid

 In the end it should be the economic costs to consumers that should drive the decision. For the archipelagic Philippines, what would be fair and reasonable to consumers would be an archipelagic power grid where each major island would beself sufficient in its base-load supply and only get where feasible the peaking and reserve power from other islands.  Even this one needs to be economical. It would not be sensible for Palawan to secure its peaking power from outside because it is so far away from the other islands. Down the road when it gets to say 200mw, maybe it can do the reverse. Buy its main supply from the Luzon grid through a submarine cable and then be self-sufficient in peaking and reserve power. For now what makes sense for Palawan is to develop its own base-load power using mini-hydro and natural gas. Temporarily supplement it with diesel plants.  Solar does not make sense unless it becomes self-regulating with its own battery storage capability at reasonable costs. Palawan is also tied up with long term power supply contracts with DMCI and Vivant Delta P with guaranteed contracts on bunker c power for 20 years.

 Let us be realistic when we dream of these inter-island grid connections. We can do so by deciding first on what role of the inter-island connection. Will they be for main source of power or for resource sharing of excess power for peaking and reserve?

 It seems our power grid dreams are imagined by the power generators for their own interest.  The government officials will dream the right dreams if they do so purely from the interest of the country and the Filipino consumers.


MatuwidnaSingilsaKuryente Consumer Alliance Inc.





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