A deeper look at the New Year power catastrophe
Anyare?
A happens. B caused A to happen. C is the solution to fix B so that A does not happen again. D needs to be done to get to C.
The power disruption which, as of this writing, continues to plague the city and province of Iloilo is maddeningly something that we are familiar with. Whatever the specific circumstances which caused this catastrophe are, the underlying fundamental problem of reliable and stable power supply continues to hang over the city and the province.
The cost of the blackout – economic and otherwise
There are many experts who can calculate the full economic cost of this event. A good starting point would be the lost economic output during the course of the blackout. A full day of loss translates to P450 million to just over P500 million for Iloilo City and another P650 million to close to P700 million for the Province of Iloilo. Of course, one can argue that the economy did not really shut down unlike during the early pandemic days but still the economic loss should easily translate to several billion pesos for the City and the Province combined.
Focusing on the now
In a statement released yesterday, the Panay Energy Development Corporation (PEDC) stated that “(T)he tripping of PEDC Unit 1…was due to momentary activation of vibration protection of Boiler Feedwater Pump (BFP) during load reduction, following the real time dispatch (RTD)”. This sounds sensible. On the other hand, upon scrutiny this raises more questions. First, why the load reduction? PEDC specifies the time of the tripping to have happened at 12:06 pm. As I recall, this was a hot day and demand would have been high at the time of the load reduction. Was there a problem with Unit 1 which necessitated the load reduction? Second, the activation of the vibration protection system would signify that the unit may have been vibrating beyond its tolerances, and if so, why was it vibrating enough to activate the protection system?
PEDC goes on to state that Unit 1 “immediately restarted due to a total blackout of the Panay grid” when it is likely that the shutdown of Unit 1 started the cascade which caused other plants to shut down causing the blackout.
How one plant can take down an entire grid
I am not privy to how it happened in this case but in the August 2003 blackout which hit the Eastern United States and Canada, a few plants initially went offline in Northern Ohio due to mechanical issues. The load provided by these plants was shifted to other generators eventually causing them to overload and shut down causing the blackout.
The role of NGCP
The National Grid Corporation of the Philippines (NGCP) operates and maintains the national transmission grid. The national grid itself is owned by the government through the National Transmission Corporation better known as Transco. NGCP acts as some sort of traffic cop continuously monitoring electricity demand and supply to ensure a balance between what is needed and what is available. In cases of potential imbalances, NGCP has a colored alert system. A yellow alert signifies that the available supply has fallen below the required reserves for contingencies. A red alert signifies that reserves are at zero or that a generation deficiency exists. A red alert may lead to a need for rotational brownouts.
It would also seem to follow that part of NGCP’s role would be to ensure that grid blackouts do not occur. That obviously did not happen here. I am not sure what exactly happened here but the tripping of PEDC 1 and PEDC 2 should not have led to the blackout that transpired. The two units have a total generating capacity of 166 MWs. There should have been enough capacity for the other units to have taken up the slack caused by the tripping of the PEDC plants.
As an example, the Visayan grid for today has over 400 MWs in excess capacity or operating margin. This is quite low relative to the Luzon and Mindanao grids but not low enough to cause a blackout. But then, the Palm Concepcion Power Corp plant went offline with its 135 MW in capacity and the rest followed.
So, what happened? In many other grid systems, there are measures which are automated or manually executed to contain the effect of a sudden reduction in generating capacity to ensure that a system-wide blackout does not occur. They key is to make sure that the operational plants to which the loads are transferred are not overloaded to the point forcing them to trip as well to protect their equipment. Is this what happened?
We need the true story
For this to have happened twice in a space of one year is unacceptable. We can always ask questions ourselves, rant at NGCP and PEDC but that really gets us nowhere. I specifically exclude MORE and the ILECOs because, in this case, how could they distribute electricity they were not provided? While we can point to PEDC Unit 1 as the cause that got this catastrophe rolling there are more questions that need to be answered. As I pointed out, the blackout could have been avoided with proper protocols and equipment in place and the proper execution of these protocols. So, we need to ask – is our grid and the grid operator not properly equipped to avoid these system disturbances (to use the politically correct term)?
The role of the Energy Regulatory Commission (ERC)
The ERC should really get to the bottom of this. I am not aware of the results and actions taken after the April 2023 blackout. This should not be the case here. At the very least, it should conduct a thorough and detailed investigation which should be made available to the public. We only have one national grid operator, and the people have the right to know whether they have the competency to run this thing properly.
The vibration protection activation appears to be a normal part of the asset protection system. As the boiler scales down (as a result of what they say was load reduction), it would seem normal that there would be shaking (vibration). Daw makina nga ginapatay, ga kurog. To prevent damage to the unit, you’d have vibration protection systems. The question is – what else happened which led to the abrupt shutdown or at least, unintended action, of Unit 1? Was it done too fast causing other equipment protection systems to kick in. Ultimately, patyon mo anay ang makina para indi maguba.
With the unintended loss of power, the grid experienced an imbalance triggering the whole grid system to shut down. May iban pa gid nga likely natabo nga wala ta pa nahibaloan. Duwa man lang na – human error or equipment failure? So, which one is it?
Investigators should obtain the records of the Disturbance Monitoring Equipment at the plant as a necessary part of their investigation. Ang DME is like the black box of a plane. It monitors and records data relating to a fault. At the very least we can learn something para indi na maliwat.
The point of any investigation is always to learn more about what happened to ensure that it does not happen again particularly given the high stakes involved. The second part, if necessary, is to seek accountability. Without accountability, lessons will not be learned and consequences are not brought into play.
The NGCP Bottleneck
Over the years, there have been multiple calls for a review of the NGCP Concession Agreement. Some of these may have been too early without giving NGCP a fair chance to prove its mettle. Having said that, the reason I bring this up now is that outside of this immediate event, the NGCP, over time has appeared to be the bottleneck that has stifled the development of a reliable and stable energy industry. I digress and would just like to point out that this is not about being a monopoly. Certain industries or economic activities lend themselves to being monopolies as the most efficient and cost-effective way to deliver its
services. Almost all, if not all, deregulated national electricity industries have maintained transmission and distribution activities as monopolies with regulatory oversight.
Going back, this blackout only serves as another wake-up call shedding light on the past failures of the NGCP in fulfilling some key mandates of its concession agreement.
Among others, it failed to complete 42 projects that it had inherited from the government in time. The latest completion date specified in the concession agreement was the completion of all these by December 2010. Instead, the last was completed in 2021. Further, RA 9511 which grants NGCP its franchise specifies that “…there is hereby granted to the National Grid Corporation of the Philippines, hereunder referred to as the Grantee, its successors or assigns, a franchise to operate, manage and maintain, and in connection therewith, to engage in the business of conveying or transmitting electricity through high voltage back-bone system of interconnected transmission lines, substations and related facilities, system operations, and other activities that are necessary to support the safe and reliable operation of the transmission system and to construct, install, finance, manage, improve, expand, operate, maintain, rehabilitate repair and refurbish [emphasis mine] the present nationwide transmission system of the Republic of the Philippines…”. Beyond the 42 initial projects, the delay or outright ignorance of projects designed to meet the objectives of its franchise and concession have now all added add to what we are experiencing today. Specific to Panay are the supposed construction of the transmission infrastructure from Luzon to Panay via Mindoro. We remain tethered to the inherently inefficient grid transmission infrastructure which goes through Samar, Leyte, Cebu, and Negros. Additional network capacity would have theoretically allowed economically feasible sourcing of generated power from the Luzon grid or the Mindanao grid which both have significantly higher reserves than the Visayas grid.
This also brings to light the failure to complete the Mindanao-Visayas Interconnection Project despite having been in the pipeline since 2013.
Finally, in spite of the government’s push towards Renewable Energy (RE), proponents have encountered delays lasting to over a year for the required System Impact Study (SIS). Before a new energy source can be added to the national grid, a proponent or applicant must apply for an SIS from NGCP to find out how adding that facility will affect the grid. Existing RE generators also continue to be challenged by grid connection leading to stranded energy generated from the solar farms on Negros island.
It cannot be that this failure to make timely investments comes from the lack of money. NGCP has been profitable from the beginning. It has already made back its original concession fee of $3.95 billion. Further, for most of its existence, NGCP has paid its shareholders more in dividends compared to the investments it has made in capital expenditures for the grid. This does not actually make economic sense as the more they expand the network, the more money they should make.
There have been more than enough reasons to do a detailed review of NGCP’s 50-year concession contract. It has not been a single issue or a single event that necessitates this review. Instead, it has been a series of acts or behaviors which has set back the development of the industry and by extension, the national economy, which calls into question the competence and motivations of an entity imbued with significant public interest.
While there is the formal matter to decide on whether to continue the concession agreement in 2034, RA 9511 provides an avenue for an earlier period as specified in Section 2 which states:
“This franchise shall be for a term of fifty (50) years from the date of effectivity of this Act and is hereby granted under the condition that it shall be subject to amendment, alteration, or repeal by Congress when the common good so requires.”