Third OECD-DOE Workshop: Unlocking finance and investment in offshore wind power and energy efficiency in public buildings in the Philippines, 6-7 March 2024, Makati, Philippines

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1) Philippine Grid Diagnostic and Roadmap for Smart Grid Development
2) Upgrading Energy Regulations for the Philippine Energy Regulatory Commission
DOE and OECD Workshop
Session 3. Business models for grid expansion and
upgrade to accommodate new investments in offshore
wind in the Philippines
7 March 2024
Dr Romeo Pacudan
Technical Director, Ricardo Energy & Environment
Guildford Office (Surrey Research Park)
United Kingdom

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AGENDA
1. Transmission Development and Smart Technologies
2. Grid Governance
3. Technical Update of the Philippine Grid Code

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1. Smart Technologies
Philippine Renewable Energy Aspirational Target
• The Philippine Government set an aspirational target of
increasing the share of renewable energy to 50% of the
power generation mix in 2040.
• This target corresponds to a total additional cumulative
installed capacity of 73,183 MW from renewable energies
(solar, hydro, wind, geothermal and biomass) throughout
the country between 2025 and 2040.
• These capacities can be developed in geographic areas
designated as Competitive Renewable Energy Zones
(CREZ) where renewable energy resource potential is high
and cost effective while at the same time within proximity to
the transmission network
• The government identified 25 zones across the country with
the highest commercial interest for inclusion in transmission
scenario development.
• These CREZ have an estimated gross capacity of 152 GW
of new wind and solar photovoltaics (PV)

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1. Smart Technologies
Technical Challenges and Smart Technology Responses
Potential Impact of VRE on Transmission Network Potential Smart Technology Responses
Voltage Management Issues
Renewable generation causing voltage rise and swings within the network,
including periods where distribution networks may be at zero or negative load
overall in the daytime and draw load at night.
• SCADA/EMS studies and optimisation
• Controllable reactive power technologies
• Demand side response
• Connection requirements and flexible connections
Uncertainty/Reduced Flexibility of VRE Outputs
Renewable generation is not dispatchable, with the generation dependent on the
natural energy source – this introduces challenges in planning and balancing the
system
• SCADA/EMS studies and optimisation
• Improved forecasting of connected VRE
• Energy storage
• Flexible connections and demand side response
• Reserve policy
Network Congestion
Additional generation capacity using up network equipment capacity, preventing
additional connections. This may be particularly relevant in CREZ areas where
VRE will be clustered.
• SCADA/EMS studies and optimisation
• Dynamic asset rating
• Demand side response
• Strategic reinforcement
Loss of Fault Current
Issues include dynamically changing network conditions and lower fault levels
without contribution from VRE. In the longer term, different approaches are needed
to manage grid protection across the whole grid.
• Network studies to review static protection settings
• Dynamic protection settings
• New fault detection sensing / protective devices not reliant on fault current
Reduction in System Inertia
Inertia is integral to grid stability, and is created by large, synchronous spinning
generation. Periods where the proportion of VRE generation is high will have
significantly reduced inertia, risking the stability of the grid.
• Wide Area Monitoring
• Synthetic inertia

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1. Smart Technologies
CREZ Potential Impact of VRE Integration on Transmission Network
North Luzon CREZ South Luzon CREZ Visayas CREZ Mindanao CREZ
L1, 2, 3,
4
L5 L6 L7,8,9
L10, 11,
12
L13
MR1,
2
Py1,
2
N1,
2
B1 S1 Mn2
Mn4,
8
Mn7
Voltage
Management
Issues
L L L H M L H M M H H L M M
Uncertainty
of VRE output
H M L H H L L H H L L L H M
Congestion H M L L H L L M M L L L M L
Loss of fault
current
H M M H H L M H H M M L M M
Reduction in
System
Inertia
H M L H H L L H H L L L H M
Note: H – high; M – medium; L – low. The CREZ zones are based on Figure 1. The CREZ are individually identified by an
abbreviation of the island they are located on and a number. The naming convention for CREZ “L1” refers to Luzon 1, for
example. Additionally, “N” refers to Negros, “Py” to Panay, “B” to Bohol, “Mn” to Mindanao, “S” to Samar, “Ms” to Masbate,
“Mr” to Mindoro, “C” to Cebu, and “Pw” to Palawan.

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1. Smart Technologies
Smart Technology Road Map for Energy Transition
The road map for Philippine energy transition looks at the process of
addressing specific challenges anticipated in respect to the energy
transition and the increasing capacity of inverter connected variable
renewable energy powered electricity generating plant connected to the
transmission network.
Key actions to address network challenges:
• Voltage management issues
• Uncertainty/reduced flexibility of VRE output
• Network congestion
• Reduction in fault current
• Reduction in system inertia
Pursue the smart technology road map as part of the Transmission
Development Plan (TDP)

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2. Grid Governance
Business Models for Private Sector Participation in Transmission Investment
Business Model Description
Privatisation Privatisations provide ownership of the transmission network in a defined area to a private company. In most cases
the government implements this business model by privatizing all or a part of a government-owned transmission
company. This can be done through a trade sale or a public flotation. Once privatized, the private transmission
owner is responsible for operating and managing the existing network and for financing and carrying out all new
transmission investment.
Whole-of-grid concession
(The Philippines)
Whole-of-grid concession provides similar rights and responsibilities to privatizations, but for a shorter period. In
most cases, the government implements this business model by the competitive tender of the concession and
enters a concession contract with the winning bidder. Once the concession contract is awarded, the private
concession company (the winning bidder) is responsible for operating and managing the existing network and for
financing and carrying out all new transmission investment.
Independent power transmission
(IPT)
IPTs provide rights and obligations associated with a single transmission line or a package of a few lines. In most
cases the government implements this business model by tendering the contract. In some cases, the contract is
directly awarded. Once the contract is awarded, the IPT (the winning bidder) is responsible for building and
operating the line or package of lines defined in the contract. The IPT has no rights or responsibilities for the existing
network or to new transmission investment other than the rights or responsibilities defined in the contract.
Merchant investment Merchant investors build and operate a single transmission line (“merchant line”). In many cases this is an HVDC
line. The merchant investor will build the convertor stations at either end of the line. These stations will convert the
current from AC to DC and back again. In most cases, merchant lines are a private initiative and not initiated by the
government.
Dedicated line for IPP New line evacuating power from Independent Power Producer (IPP), connecting to existing grid.

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2. Grid Governance
Possible Evolution of Whole-of-Grid Concession Model
The legal implications
• a scheme that would provide for additional
transmission providers will entail amendments to
law/s.
• a scheme involving building and leasing
transmission facilities will require cooperation of
the transmission provider.
o Without such consent, additional investment in
transmission facilities is limited to the last
paragraph of section 9 of the EPIRA, where
compensation for the facilities built is at fair
market value.

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2. Grid Governance
Strategic Transmission Network Development Planning
The current Transmission Development Plan (TDP) is a sub optimal plan – responding mainly to corporate objectives rather the strategic
objectives of the government
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Findings Recommendations – action that could be done without changing
the EPIRA Law
Existing rules and regulations require strong interaction and
cooperation between DOE, TRANSCO and NGCP in transmission
planning
Establish TRANSCO as the Strategic Transmission Network Planner,
to prepare the overall transmission road map under the directions of
the DOE
• Roadmap will take a country-wide holistic view to develop an
optimized plan for necessary investment in the transmission
network to meet the NDC
• TRANSCO will proactively plan the transmission network in
coordination with the DOE
• TRANSCO will require support from agencies and access to data
to create their transmission model for making their own analysis
and recommendations
• The Strategic Transmission Development Plan developed by
TRANSCO will be the basis for approving NGCP’s TDP
The smart grid regulatory policy requires the Transmission Network
Provider to prepare a smart grid roadmap

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3. Grid Code Amendments
PGC, PDC and PSGG amendments
ETP/UNOPS through Ricardo Energy & Environment is currently
updating the Philippine Grid Code to accommodate new technologies:
1) energy storage
a. pumped storage hydro power
b. battery energy storage
c. compressed air energy storage
d. flywheel energy storage
2) offshore wind power plants
3) offshore PV power plants
4) nuclear power plants
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3. Grid Code Amendments
proposed amendments
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Key Areas Recommended Updates
1. Power Quality Standards • Proposed updates to power quality standards to align to IEC 61000 Series
with a five-year phase in time
2. Fault Ride Through Capability • Wind turbine and PV fault ride through capability aligned to PDC and
IEEE2800-2022
3. Reactive Power Capability • Large Wind turbine and PV Reactive Power Capability aligned to
IEEE2800-2022
4. Frequency Tolerance Range and
Mandatory Response
• Frequency Capability aligned to IEEE2800-2022
5. New section on conventional
storage
• Requirements for conventional energy storage systems (ESS)
6. New section for inverter-based
energy storage systems
• Requirements for inverter-based energy storage systems (IBESS)
7. Ancillary Services • Proposed updates to Ancillary Services based on international practice,
specifically Ireland, UK, USA and Europe

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Thank you
Dr Romeo Pacudan
Technical Director
Sustainable Energy Systems
Ricardo PLC
romeo.pacudan@ricardo.com