Finnish firm Wärtsilä is offering a suite of technology solutions such as “hybrid engine plants” and battery energy storage systems to address the repeated strike of strained power supply in the Luzon grid.
The company will also aim to address the protracted power interruptions or brownouts in off-grid domains, part of the country’s energy transition journey.
Kari Punnonen, business director for Australasia region of Wärtsilä Energy, indicated that as the Philippines advances on its energy transition track wherein it will be integrating more renewable energy (RE) into its power system, that approach needs to be coupled with a “balancing technology” to plug any capacity dip resulting from the intermittent generation of the RE facilities.
“In connection to the big energy transition, technically what happens is that: you have those renewables there -- whether it's solar or wind. They are of course very unpredictable— it comes and goes according to the wind and sun and clouds and so on. And the system will need some technology there all the time to more or less instantly cover when this change happens...the more you get these renewables, then the need for balancing is also growing,” he explained.
One major technology being dangled by the Finnish company for “balancing needs” in the electricity system is its “engine power plants” which can be ramped up very quickly when there are sudden capacity losses in the system that has to be filled immediately. These are also ideal for hybrid power system deployments to ease the distressing blackout predicaments of the off-grid areas, or those island-grids and other jurisdictions that are not physically connected to the main power grids.
“In order to enable that transition, you would definitely need to keep on building this balancing capability on parallel. Because without that one, it's a bit like a chicken and the egg issue—if you don't have that balancing capability, you cannot put more renewables,” the Finnish firm executive noted.
The engine plants, he said, can either run by gas or diesel fuel, but the carbon footprints would still be reduced because of the technology coupling that they will be having with renewables.
In the regime of high fuel prices in the world market, he qualified that the end-cost that shall be passed on to consumers will still be less, since the use of diesel or gas in running the power plants can be minimized as renewables would also take the place of electricity generation on other times of the day.
“This renewable portion is doing the main job which is good. And then just need to make sure that this constant balance is there. These engine plants, the actual running hours become quite small. So then, you are strongly reducing your CO2 (carbon dioxide) emissions. By having that balancing capability, you can increase your renewables,” Punnonen stressed.
Relative to the targeted massive scale on-grid RE installations in the country, the company executive conveyed that the other industrial solution that Wärtsilä has been deploying to Philippine energy market is ‘battery storage’ – which is also the ideal technology match toward ensuring reliable supply availability in the power system.
“We are among the three largest integrators providing energy storage solutions... in the Philippines, we are currently constructing for our clients several energy storage facilities,” Punnonen stated.
He said the rollout of these battery energy storage systems are already being carried out with their partner-power producers in the Luzon and Mindanao grids; and some of these are even utilized as ‘peaking solutions’ when there is demand surge in the grid.
“The first ones are already there just being introduced and they are energy storage systems in the utility scale—meaning, connected directly to the main grid. Some of them are in the Luzon and some of them are also in the Mindanao sites and even some of the islands,” the Wärtsilä executive asserted.
On the wider core of the ‘energy transition agenda’ being pushed in the country, it was similarly opined that a re-building of market structure has to be set in place not just for capacity balancing, but also to re-assess risks on future investments so the legacy power plants would not just end up getting stranded.
David Kayanan, financial and market analyst at Wärtsilä, pointed out that power players “have to be very careful even with the investments that they make today. Because for instance, every additional coal or large scale gas power plant that you build actually serves as a barrier for renewables. These technologies - they lack the flexibility to integrate renewables in at some point. You don't want to be in a situation where it's either or -- either I run my coal power plant or I run my solar power plant, because either way, one of them will be stranded asset.”
He highlighted that “what we've seen in many other countries is that: if you allow these assets to actually compete in an open market, then it's actually renewables that would be in. It will force early retirement of some of the legacy coal assets so that's one of the key things that the power community should be mindful of.”
If the energy transition paradigm set forth by Philippine energy policymakers as well as the mid-century net zero goal would be concretized, Kayanan emphasized that the eventual cost of electricity for Filipino ratepayers will turn cheaper, as the cost savings had been calculated to reach as much as $6.5 billion.