On EVs and RE as addition to fossil fuels

 MANILA, Philippines — Last Tuesday, I attended the BusinessWorld Insights forum on the topic, “Powering the Electric Shift” held at Makati Diamond Residences. It was sponsored by Aboitiz Power (AP) and co-sponsored by Toyota, Meralco and Nissan, and hosted by News5 anchor Jester de los Santos.

Welcome remarks was given by Lucien Dy Tioco, EVP of BusinessWorld, and the keynote address was given by DOE director Patrick Aquino. He discussed again the renewable energy (RE) targets of 35 percent of total generation by 2030 (from 25 percent in 2025) and 50 percent by 2050. The electric vehicles (EVs) target is at least 50 percent of all vehicles on Philippine roads by 2040, and over 20,000 charging stations.

The first panel discussion was about “EVs and the grid: Risk or resource?” The speakers were ERC director Sharon Montaner, TransCo president and CEO Joseph Omar Alday Castillo, Nissan manager Rhys Alexei Murillo and Meralco vice president Ralph Menchavez.

The overall sentiment is that EVs are not risk to the grid and there is a need to couple EV adoption with more RE generation.

The second panel was about “Urban energy in motion: Electrifying public and commercial transport.” The speakers were LTFRB official Joel Bolano, BYD Phl managing director Bob Palanca, Jetour Phl managing director Miguelito Jose and Voltai co-founder Nico Policarpio.

Well BYD and Jetour do not produce EV buses but the latter has EV trucks. Voltai has full EV motorcycles and many battery swapping stations (BSS) in Metro Manila. The motorcycles just come and swap their low batteries with newly charged batteries, within minutes, then go. Cool.

Having more EVs on our roads is good, motorists have additional choice whether to get an internal combustion engine (ICE) vehicle or EV. But what I do not like about many EV advocates is their explicit or implicit despise of fossil fuels.

Consider the EVs’ exterior and interiors – paint, electrical insulation, leather seats, dashboard, synthetic rubber tires, polypropelene bumpers, etc – all of these are petrochem products, from oil and gas which are fossil fuels. Even if all vehicles in the world are EVs, we still need fossil fuels and hydrocarbons. Otherwise cars will be ugly with unpainted corroded metal body, chassis and mags, bamboo electrical insulation, abaca or wooden seats and battery. Like an old joke – a wooden car with wooden body, wooden tires, wooden engine, wooden battery and it wouldn’t start and run.

Also last June 30, AP through its RE arm Aboitiz Renewables, Inc. inaugurated its 92.6-megawatt peak (MWp) San Manuel Solar power plant in Pangasinan. It is built in coordination with the National Grid Corp. of the Philippines, provincial and municipal government and host communities.  The San Manuel plant supplies power directly to the Luzon grid via the San Manuel 69-kV Substation by NGCP.

The event was attended by DOE Secretary Sharon Garin, Pangasinan Vice Gov. Mark Lambino, San Manuel Mayor Kenneth Marco Perez, other local officials. AP president and CEO Danel Aboitiz optimistically stated that “As demand for electricity continues to grow, power generation investments like San Manuel help strengthen our energy system, diversify our energy mix, and support the Philippines’ long-term energy security.”

Good. We need more power plants, more electricity generation, both RE and fossil fuels. The RE law’s mandatory renewable portfolio standards (RPS) for distribution utilities and DOE’s target of 50 percent RE by 2050 are forcing generation companies to hasten addition of more solar, wind and other RE.

I checked the Wholesale Electricity Spot Market (WESM) daily operations report in the Independent Electricity Market Operator of the Philippines (IEMOP) website. Two weeks ago, June 15-21, four days in a week that prices at daytime were lower than nighttime. Last week, June 22-28, three days that daytime prices were lower than nighttime prices. Like last Sunday June 28, daytime price was P3.80/kwh and nighttime price was P6.15/kwh.

Why this is happening, mainly because of more solar – industrial solar plus rooftop solar. Last June 28, daytime requirement was 13,904 MW while nighttime was higher at 14,258 MW. Nighttime demand will always be high – household lights, aircon, TV, even EV and gadgets charging, plus street lights which are many.

The proliferation of rooftop solar plus huge volume of Green Energy Auction (GEA) may result someday in a situation where daytime price drops to P1/kwh and nighttime price rises to P10/kwh, the coal-gas-hydro-geothermal plants must work harder because most solar is absent.

If activists will demonize the coal and gas plants for “price gouging,” some of these plants will slowly fade away and nighttime power supply declines while demand keeps rising. Either people will have blackout or endure even higher evening prices.

Grid stabilization requires that power supply is within a narrow band or range, plus or minus few hertz, from power demand otherwise there will be overloading or underloading that can result in blackout. When power supply is highly erratic, or when huge swath of industrial solar plus rooftop solar become zero at night, NGCP demand for more ancillary services (AS) goes up.

The DOE ordered the NGCP before to procure half of its AS requirements through the reserve market but prices there are volatile. The DOE later instructed NGCP to directly contract more AS to temper such price volatility.

Good. Meanwhile, more RE via more GEA means more AS requirements especially at nighttime to maintain grid stability and those AS are not free, they have costs that will be passed on to the consumers.

Ultimately we must revise the RE law, reduce or abolish the mandates. RE should be addition, not substitution to fossil fuels.