August 21st, 2013 Posted in Energy and Power Market Modeling


My sincerest thanks to the readers, government officials, private investors, power developers, funding institution and non-government organizations that will respond positively to this conversation that I started recently as part of my functions as Senior Power Generation Engineer at SKM.

It is my fervent hope that this conversation will be continued as a result of your endorsement to the right parties and that timely coordination and meetings are done soonest as time is of the essence in having an integrated and optimized energy master plan for the country before year end 2013.



If you have monitored the news and pronouncements from the DOE Secretary and its various Bureau Directors, the DOE is in the process of preparing an LNG/Natural Gas Master Plan to prepare the country for the anticipated depletion of the Malampaya gas reserves by 2022/23.

Having been an Energy & Climate Change consultant both locally and internationally, I believe that an optimized master plan for the power, LNG, natural gas, oil, other renewable energy sources, gas pipelines and power transmission and submarine cable to interconnect the various island grids such as the Luzon-Visayas grids to the Mindanao grid will serve the best interest of the country by way of providing secure and cost-optimized energy and power system for the Philippines, thus sparing the various energy and power users from expensive energy and power costs.

This master plan will identify the technology, capacity, annual generation and capacity factor, and timing of investment so that overall costs are minimized (levelized costs consisting of annual capitalized costs, fixed expenses, variable expenses and fuel costs). In doing so, short-term operation is optimized using the short-run marginal cost (SRMC) while long-term operation is optimized using the long-run marginal cost (LRMC).

SKM is best positioned to provide this master planning support to the institution selected to conduct the LNG/Natural Gas Master Plan as it can setup and calibrate (backcasting) the power market model (PLEXOS) with recent data of the Philippine grid, power plant operating parameters, supply/demand balances, and system constraints and objectives to be met. Once the power market model is validated, it can used to optimize and simulate various supply/demand scenarios for the country using the 2012-2030 Philippine Energy Plan (business as usual or reference case, high renewable case, and high renewable + nuclear case).

Among the possible outputs of the master plan which the power market model can study in great detail are:

1) Location, timing and capacity of LNG receiving, storage, re-gassing and CCGT power plant, send-out gas to pipeline (BATMAN 1, BATMAN 2, BATCAVE).

2) Location, timing and capacity of HVDC submarine cable connecting the Luzon-Visayas grids to the isolated Mindanao grid to address severe capacity deficits in Mindanao during dry periods and optimizing the operation and sharing of scarce capacity nationwide so that surplus power could be transmitted to any parts of the 3 main island grids.

3) Location, timing and capacity of intermittent and dispacheable renewable energy resources (solar PV, wind, mini-hydro, biomass and ocean thermal conversion) that considers GHG emission targets, feed-in-tariffs and RE capacity caps so that its impact on electricity tariffs is minimized (RE generation per PEP 2012-2020 is at most 3% while conventional fossil generation is 97% of GWh energy generation).

4) Optimized plans – Distribution Development Plan (DDP), Power Development Plan (PDP), Transmission Development Plan (TDP) and Philippine Energy Plan (PEP).

5) Help regulatory agencies (DOE, ERC, NEA) in reviewing the economic viability and dispatch level/generation profile of power plant projects for tariff approval and licensing.

6) Assist lending institutions and funders (local and international financing institutions) in reviewing the level of power dispatch and economic viability of proposed power plants requesting capital investments (equity and debt financing).

7) Provide the DOE with a robust, accurate and easy-to-use and easy-to-update power market model (PLEXOS) that accurately represents the electrical network and all energy flows in the country.

8) Allow the dam operators of the country (IPPs, NIA, NPC/PSALM) and the regulatory agencies (DOE, ERC, WESM/PEMC) operate safely the large water impoundments in the country that provide power, irrigation and domestic water supply so that the dams may discharge pre-emptively excess water to provide ullage for at least one (1) storm to mitigate possible flooding in face of an incoming storm being tracked by the doppler radars of PAGASA which measures location, velocity, expected time of arrival and projected rainfall (in mm per hour per square meter of hydrologic basin area).

The author of this conversation is presently a Senior Power Generation Engineer at SKM.

Please share your thoughts, suggestions and comments on this conversation for the sustainable energy future of our country.


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