ERC expresses concern about grid’s ability to absorb net metering

By Victor V. Saulon – November 19, 2018 | 10:17 pm
from Business World

THE Energy Regulatory Commission (ERC) said the removal of the 100-kilowatt (kW) cap that solar rooftop energy generators are allowed to inject into the power grid could have an adverse effect on transmission lines, which may not be able to accommodate injections of power beyond that limit.

An ERC official made the statement in view of a Senate bill that allows bigger establishments to export power to the grid to harness their energy output.

Sharon O. Montañer, who heads ERC’s financial and administrative service, said in an interview that there is no existing study that looked into the feasibility of the system taking more than what was allowed under existing rules.

She said the passage of the bill into law would trigger a new study on the grid’s ability to absorb new output.

Senate Bill 1719 aims to further promote the adoption of rooftop solar technology among residential, commercial, industrial and government end-users. It seeks to amend Republic Act. No. 9513, or the Renewable Energy Act of 2008.

During a hearing on the proposed bill on Monday, Ms. Montañer said that as stated in the exploratory note of the bill, removing the 100-kW cap on distributed generation aims to allow large electricity consumers to avail of the net metering program under RA 9513.

“With the proposed incentives under the bill, this is expected to result to a drastic increase in solar energy being exported to the grid,” she said.

Under net metering, a solar rooftop user has a two-way connection to the grid and is only charged or credited, as the case may be, the difference between the energy it imports and what it exports.

Ms. Montañer said it was uncertain the drastic increase in renewable energy injected could be handled by the grid, particularly as solar power is intermittent in nature.

“A less sophisticated grid and distributive system such as in the Philippines, may be less effective in ensuring grid integrity, and consequently reliability and quality of power,” she said.

“A thorough grid, system, and distribution impact study would help determine how much in exported capacities the grid may accept without unduly compromising power supply stability,” she added.

She said the electricity grid was originally constructed to flow power from the high voltage part of the network to the low voltage part.

Capital expenditures cover the installation of devices to ensure that the frequencies of power being moved along the grid system and into households and establishments are within tolerable limits, she said.

“All these costs are passed on to consumers” she said.

Ms. Montañer said the wide application of net metering and the resulting increase in power capacities being exported to the grid from the low voltage part of the network would require additional capital expenditure on network upgrades.

“As such, electric users with solar panels are actually increasing the capital costs of the network,” she said.

Based on ERC computations, the exporter of solar power is paid only the “blended” generation cost, net of transmission, distribution, system loss and other related charges and subsidies of P5.34 per kWh.

Under the proposed amendment, the solar power exporter will instead be paid P11.46, which is the retail rate. The rate is even higher than the last feed-in tariff rate for solar of P8.69 per kWh, which the ERC said had outlived its purpose.

Victorio Mario A. Dimagiba, president of Laban Konsyumer Inc., said his concern is how to the proposed legislation will pass on the costs to consumers.

“Somewhere along the line somebody will pay, but will the DU (distribution utility) absorb the cost?” he said during the hearing.

“This bill could be another measure to trigger inflation in the cost of electricity,” he said. “We should look for technology, projects, programs that should lower [the cost of] electricity, not the other way around,” he said.