MANUEL S.

ENVERGA UNIVERSITY FOUNDATION

COLLEGE OF ENGINEERING AND TECHNICAL DEPARTMENT
LUCENA CITY

RENEWABLE ENERGY

A Case Study
By

Ysrael M. Tatlonghari
III-BSECE

Submitted to

ENGR. ARIEL V. NICOLAS

Instructor I

In partial fulfillment of the Requirements for the Subject

Materials Science and Engineering
MKCB3313/MKCB44

ACKNOWLEDGEMENT

The researcher wants to give thanks to all the persons that have become big part of this study.
First I would like to thank god for giving me the strength to finish this study.
To my family, for their moral and financial support in order to finish this study.
To all my friends and classmates who had helped the researcher to do this study presentable.
To Engr. Ariel Nicolas, for guiding and guiding me in order to make the study well done achievement.
To Manuel S. Enverga University Foundation(MSEUF) for helping Student Assistance (SA) be able to
become a responsible in the future.
-Mark Robert

DEDICATION
This case study is greatly dedicated
To God Almighty for showering my numerous blessing, wisdom and strength while doing this study,
for giving me guidance all the way through my study and for enlightening my mind and heart during my
darkest hours.

To my classmates and Friends for always being there to cheer me up, support, and help lighten my
burdens.

To my beloved Instructor, Engr. Ariel Nicolas for giving me all the support and supervision in every
conducted activity related to my profession. For giving me advise and reminder that will help me in the
application of my learning skills in the study and for showing me the way to a good path.
To my family, especially my mama and papa for supporting me through all the study and for giving
your unconditional love.

-Mark Robert

TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................................4
BACKGROUND.................................................................................................................................................6
FACTS ABOUT HYDROELECTRICITY........................................................................................................6
Key Arguments..............................................................................................................................................6
Important Issues............................................................................................................................................8
Generating capacity mix in Mindanao in 2011........................................................................................10
Demand Forecast vis--vis Generation Capacity...................................................................................11
Hourly loads in the Mindanao power system..........................................................................................12
ALTERNATIVES..............................................................................................................................................12
WHY WE USE THE HYDROECLECTRICTY IN THE PHILIPPINES?.......................................................12
PROPOSED SOLUTION................................................................................................................................15
DoE Approves Hydropower Project in Northern Luzon..............................................................................15
Solutions to Power Problem in Mindanao Almost Done.............................................................................15
What Government will do?..........................................................................................................................16
RECOMMENDATION.....................................................................................................................................17
REFERENCE/S...............................................................................................................................................17

INTRODUCTION
Hydroelectricity is electricity generated by hydropower, i.e., the production of power through use of
the gravitational force of falling or flowing water. It is the most widely used form of renewable energy. Once
a hydroelectric complex is constructed, the project produces no direct waste. Small scale hydro or microhydro power has been an increasingly popular alternative energy source, especially in remote areas where
other power sources are not viable. Small scale hydro power systems can be installed in small rivers or
streams with little or no discernible environmental effect or disruption to fish migration. Most small scale
hydro power systems make no use of a dam or major water diversion, but rather use water wheels to
generate energy. This was approximately 19% of the worlds electricity (up from 16% in 2003), and
accounted for over 63% of electricity from renewable sources. While many hydroelectric projects supply
public electricity networks, some are created to serve specific industrial enterprises. Dedicated
hydroelectric projects are often built to provide the substantial amounts of electricity needed for aluminium
electrolytic plants.
Hydroelectric Energy
Solar energy is produced by sun and wind energy is produced by moving of winds. The heat
caused by sun drives the wind. The movement of winds is then captured by wind turbines. Both wind and
sun cause water to evaporate. The water vapor then turns into rain or snow and flows down to sea or
oceans through rivers or streams. The energy of the moving water can then be captured and called
as hydroelectric power. Hydroelectric power stations capture the kinetic energy of moving water and give
mechanical energy to turbines. The moving turbines then convert mechanical energy into electrical energy
through generators. Dams around the world have been built for this purpose only. Hydropower is the largest
producer of alternative energy in the world. There are different types of hydropower plants. The selection of
hydropower plant depends on many volume and flow of water. Hydropower is renewable, constant,
predictable and controllable source of energy. They emit no greenhouse gases and are environment
friendly. On the negative side, they may cause adverse effect on aquatic life, reduce flow of water which
may affect agriculture, require huge costs to build and may cause havoc if they get breakdown.

Many factors enter the picture when you want to calculate the price for energy sources: the electricity
system, future infrastructure needs, level of demand, future fossil fuel prices, interest rates, policies, carbon
prices and more. All this needs to be considered when talking about future electricity systems. Renewable
energies are often regarded to be too expensive and not competitive with conventional fuels to
cover electricity demands especially in a developing country like the Philippines. Tis study will have a
closer look at the costs of RE generation with a special focus on the context of the Philippines.

This is the Statistics of HydroElectricity Renewable Energy

BACKGROUND
FACTS ABOUT HYDROELECTRICITY
Hydropower uses the energy of moving water for a variety of useful applications. Hydroelectricity
generates electricity by harnessing the gravitational force of falling water. In 2006, hydroelectricity supplied
around 20% of the worlds electricity. Most hydroelectric power stations use water held in dams to drive
turbines and generators which turn mechanical energy into electrical energy. The largest hydroelectric
power station in the world is the Three Gorges Dam in China. A small number of countries, including
Norway, Canada, Brazil, New Zealand, Paraguay, Venezuela and Switzerland, produce the majority of their
electricity through hydropower. Hydroelectricity is a renewable energy but the building of the large facilities
needed to make it can have negative effects on the environment. Hydropower has been used to power
watermills for thousands of years although cheap electricity has largely made them obsolete in modern
times. The most common type of watermill grinds grains into flour. Tidal power is another form of
hydropower, it uses the energy of tides to create electricity.
Some of you are confused about the Renewable Energy in the Philippines?? So I?
I have already search in the internet and books. That they have many problems that doing the renewable
energies. Some of these are I have read the key problems in renewable energy.
According to international studies (lz&Beerepoot 2010; USAID 2007), the Philippines has a vast potential
for renewable energies (REs) and could become a front-runner in the region for further RE development.
Yet, RE projects still face a niche existence as they are perceived as expensive and not competitive. Ths
study
takes a closer look at these concerns.

Key

Arguments:

1. External costs make fossil fuels more expensive than RE because of signifiant
negative health and environmental impacts
Overall external costs (climate change, health, etc.) from fossil fuels are as high as 927 US
cent/kWh. These costs are not reflcted in the electricity price but need to be paid by the society in the
Philippines and elsewhere in the world. Air pollution costs the Philippine economy USD 1.5 billion annually.
Five

thousand

annual premature deaths may be due to respiratory and cardiovascular diseases from exposure to pollution
in Manila alone.

2. Due to the merit order effect, renewables reduce the overall electricity price.
There are more REs are in the market, the lower the short-run marginal costs that determine the price at
the wholesale electricity stock market (WESM). A simulation for 170 MW of RE in the Philippines
revealed that the merit order effct led to a price reduction worth about PHP 3.7 billion in 2011
3. The planned feed-in tarif (FiT) will add about PHP 5.4 to a 300-kWh electricity bill.
If the planned FiT regime for 750 MW of RE becomes effctive, it will add only PHP 0.02 per kWh to
the electricity bill. A household consuming 300 kWh monthly would only need to pay an additional
PHP

5.4

per

month.

4. Th RE sector has become a global job engine and a major market for investments
Theres account for almost half of the new electricity capacity installed all over the world.
In 2011, USD 257 billion have been invested into RE capacity. Globally, fie million jobs depend on
RE.
5. Levelized costs show that renewables become or already are competitive.
Fuel costs for coal have more than doubled since 2010 and are expected to increase in the future.
Renewables
have zero fuel costs; further cost reductions are expected due to learning curves: Photovoltaic (PV)
will decrease from 28 US cents/kWh to 19 US cents/kWh in 2015 and up to 9 US cents/kWh in the

long run. Onshore wind is expected to fall to 6.5 US cents/kWh in 2020. Levelized costs for wind,
biomass, geothermal and hydro are already competitive with fossil fuels.

6. Renewables can reduce the import of fossil fuels to increase self-suffiency.

Prices for coal have more than doubled since 1990 and are expected to further increase. Almost
99%

of

the

Philippines coal import comes from Indonesia, which is a factor for high energy insecurity. Taking an
average prize of USD 57.64 per short ton coal leads to USD 768 million for imported coal in 2012.

7. RE can reduce prices and power subsidies in offgrid areas.

Average island electricity prices are higher than for mainland grids. Ths makes RE competitive for
mini grids. In the Philippines, 30% of all households are not connected to the grid. For these unviable
areas, renewables are cost-competitive alternative to costly diesel generators. Thdiffrence between true
costs of diesel generation and actual electricity selling rates needs to be bridged by a universal charge for
missionary electrifiation (UCME), paid by every electricity consumer. Th UCME leads to estimated costs of
PHP 7.68 billion in 2013, or 11.85 centavos per kWh. True diesel power generation costs in offgrid
areas are between 13 and 20 centavos, and can even reach 28 centavos in some areas.
Important Issues
This is the Important issue that I had researched the problem about the hydroelectricity in
Mindanao
The Mindanao electric power problem, which led to a crisis situation in summer 2012, is primarily due to
inadequate baseload capacity and unbalanced generation capacity mix. The crisis might stage a comeback
when the days of relatively cooler weather and heavier rainfall are over and the annual system peaks,
which can be expected in summer 2013, kick in once again. The short-term recommended actions are as
follows: continue the rehabilitation and sustain the operations of Agus and Pulangui hydropower
complexes; minimize the bureaucratic hurdles in the building up of electric cooperatives embedded
generation capacities but only up to the extent allowed by law; undertake a more aggressive information,

education and communication campaign in Mindanao regarding the power situation and power outlook; and
address the risk aversion problem in baseload power contracting. In the medium to long term, the possible
policy responses include the following: decide with finality the fate of the privatization of Agus and Pulangui
hydropower complexes and include the concession option in the range of options; facilitate the entry of new
baseload capacity commitments and if no new investments would come in, the government could also
explore a concession arrangement; accelerate the development of renewable energy projects through
quick action in rules setting; strengthen the capacity of the regulator to deal with complex issues in the
electric power industry; and pursue the interconnection of the Visayas and Mindanao power grids. In the
summer of 2012, many people in Mindanao suffered rotating brownouts of about one to eight hours daily as
the islands power system experienced shortfalls in generation capacity. The specter of the power crisis first
called in when a long dry season in 2010 reduced the Lanao Lake water level and decreased the
generating capacity of the Agus and Pulangui hydropower plants. It visited the region again in summer
2011, and again in February 2012 through summer 2012. By summer 2012, there was no doubt that the
region was already experiencing an electrical power crisis. When the picture of a looming power crisis in
Mindanao was raised in 2009, it was met with skepticism by some representatives of civil society and
suspected as a ploy to make the Mindanaoans agree to hosting coal-fired power plants. Criticisms included
the claim that electricity demand projections by the government had little statistical basis. 2 That the
veracity of energy projections continued to be challenged as late as 2011 3 reflected the government's
failure to communicate with a greater sense of urgency the rationale for generation capacity expansion
plans and the consequences of inaction. But at the same time, no one has held the naysayers in civil
society responsible for the implications of their disaffirmation. The existing analyses of the Mindanao
situation thus far (which are mostly in popular media) tend to have emotional undercurrents owing to
exasperation or distrust. As an alternative, the discussion in this paper presents an analysis that extracts
evidence from data and applies economic principles. This paper describes the roots of the recent electric
power crisis, assesses the likelihood of it recurring in the immediate future and analyzes the possible policy
actions that can be undertaken by the government in the short term and medium to long term.

The roots of the crisis

The electric power crisis in Mindanao primarily resulted from the failure to provide generating
capacity that is sufficient to meet demand. The evidence of this is provided by a combined analysis of the
existing generation capacity mix and the projected demand in the region. Table 1 and Figure 1 show that
the Mindanao power grid is heavily dependent on hydropowerabout 51 percent of supply are coming
from hydropower plants. Thus the power system of the whole Mindanao region is susceptible to reliability
problems when drought occurs. The system is also easily affected by decreases in the available capacity of
the hydropower plants in the face of worsening deforestation of the watersheds and the river siltation
problems associated with it (i.e., the siltation of the Agus River feeding the Lanao Lake and of the Pulangui
River

in

Bukidnon).

Generating capacity mix in Mindanao in 2011

The heavy reliance on cheap hydropower in Mindanao translates to a low cost of generation in the
region. Table 2 shows that the generation price faced by electric cooperatives in Mindanao is only
Php2.90/kWh, whereas it is Php4.82/kWh in Luzon and Php4.88/kWh in Visayas. This allows consumers in
Mindanao to enjoy cheaper power rates relative to their Luzon and Visayas counterparts. Includes
distribution, supply and metering charges. Source: National Electrification Administration, as cited in the
19th EPIRA Status Implementation Report There are 39 distribution utilities in Mindanao, which consist of
34 electric cooperatives, four private investor-owned utilities and one local government-owned utility. From
the individual forecasts submitted by these distribution utilities to the DOE, the consolidated forecast for
2012 peak demand is estimated at 1,373 MW and is projected to reach 1,823 MW in 2019 (see Figure 2).
Observers say that much of the demand increases in Mindanao is due to high economic growth in the
region, which is in turn brought about by cheap electricity rates. Gross regional domestic product (GRDP) in
Mindanao from 2003 to 2009 grew faster than the national gross domestic product (GDP) during the same
period. In 2003-2009, Mindanao GRDP (in constant 1985 prices) grew by an annual average of 5.04
percent whereas GDP grew by 4.73 percent. 4 To meet the peak demand and at the same time maintain
the security and reliability of the power grid, generation capacity must not only correspond to peak demand
but also provide reserves for ancillary services needed in delivering electricity to the customers. Allowing for
a required reserve margin of at least 21 percent of peak demand (as advised by the DOE), the estimated

total generation capacity requirement during peak period in 2012 is therefore 1,661 MW. Clearly, the 1,616
MW dependable capacity (Table 1) is not enough. In fact, total available capacity during summer 2012
declined further due to the heavy siltation of the Pulangui River and the Lanao Lake, which then led to a
significant reduction of the generating capacity of the hydropower plants drawing water from these sources.
Matters were made worse with 4 Computed using data from the National Statistical Coordination Board. 6
the ongoing 30-month long repair of the Agus VI hydropower plant and the April 17 to May 8 shutdown for
rehabilitation of the PulanguiIV hydropower plant. For instance, the NGCP power outlook for April 25, 2012
showed an available system capacity of 955 MW in the face of a system peak of 1,212 MW, resulting in a
deficit of 257 MW. Sources: demand forecast - Distribution Development Plan 2010-2019; reserve margin authors

interpretation;

installed,

dependable

and

available

capacities

DOE

Demand Forecast vis--vis Generation Capacity

Basically, supply had been insufficient to meet demand, but supply and demand in electric power
systems have characteristics that are distinct from ordinary goods where a comparison of total supply
versus total demand can be straightforward. What the Mindanao region is in dire need of right now is
generating capacity capable of supplying base load. A brief additional explanation of supply and demand
characteristics would help clarify this point. 7 As alluded to in the preceding paragraphs, there are different
levels of supply capacities in power installed, dependable and available capacity. Installed capacity or rated
capacity is the total of the maximum capacities of the generating units in a power plant, as specified on the
nameplates of the units. The total installed capacity in a grid (2,022 MW in the Mindanao grid) is rarely
delivered exactly because of changes in environmental conditions in each power plant site. Thus,
dependable capacity (1,616 MW in the Mindanao grid), which depends on such factors as the generating
units efficiency ratios and temperature variations, is lower than the installed capacity. Available capacity
(1,280 MW in the Mindanao grid in April 2012), or the total amount of power that is actually injected in a
grid, could also be lower than the dependable capacity when there are generating units which are offline
due to scheduled maintenance or forced outages. With respect to demand, there is base load, which is the
more or less constant part of the total load or total demand in an electric power system per unit of time, or
the amount of electric power required to meet the minimum demand of connected customers. The
maximum load in an electric power system, on the other hand, is called peak load. Somewhere in between

base load and peak load is the intermittent load. Figure 3 illustrates these concepts using the Mindanao
hourly loads on April 2, 2012.) To meet base load or base demand, so-called baseload power plants are
needed. Baseload power plants are such generating plants which can produce energy at a constant rate
and can be relied on to efficiently meet a regions continuous demand for electric power; thus, they run all
year round. In contrast, intermediatepeaking plants run to provide load-following supply and when there is
relatively higher demand for power, and peaking plants run only when there are system peaks
Hourly loads in the Mindanao power system
The traditional baseload technologies are coal, geothermal and nuclear. Hydroelectric power plants
can provide baseload capacity to a limited extent only because the water level is not constant and may run
really low when a long drought occurs. With respect to intermittent power sources such as wind power and
solar power, there are still much research and technological developments going on regarding their use for
baseload capacity. Moreover, the cost of generation from these sources, although declining in recent years,
is still prohibitively high for them to be used in providing baseload capacity.

ALTERNATIVES
WHY WE USE THE HYDROECLECTRICTY IN THE PHILIPPINES?
Here are the reasons:
1. Hydroelectricity is a renewable energy source.
Hydroelectricity uses the energy of running water, without reducing its quantity, to produce
electricity. Therefore, all hydroelectric developments, of small or large size, whether run of the river or of
accumulated storage, fit the concept of renewable energy.

2. Hydroelectricity makes it feasible to utilize other renewable sources.

10

Hydroelectric power plants with accumulation reservoirs offer incomparable operational flexibility,
since they can immediately respond to fluctuations in the demand for electricity. The flexibility and storage
capacity of hydroelectric power plants make them more efficient and economical in supporting the use of
intermittent sources of renewable energy, such as solar energy or Aeolian energy.
3. Hydroelectricity promotes guaranteed energy and price stability.
River water is a domestic resource which, contrary to fuel or natural gas, is not subject to market
fluctuations. In addition to this, it is the only large renewable source of electricity and its cost-benefit ratio,
efficiency, flexibility and reliability assist in optimizing the use of thermal power plants.
4. Hydroelectricity contributes to the storage of drinking water.
Hydroelectric power plant reservoirs collect rainwater, which can then be used for consumption or
for irrigation. In storing water, they protect the water tables against depletion and reduce our vulnerability to
floods and droughts.
5. Hydroelectricity increases the stability and reliability of electricity systems.
The operation of electricity systems depends on rapid and flexible generation sources to meet peak
demands, maintain the system voltage levels, and quickly re-establish supply after a blackout. Energy
generated by hydroelectric installations can be injected into the electricity system faster than that of any
other energy source. The capacity of hydroelectric systems to reach maximum production from zero in a
rapid and foreseeable manner makes them exceptionally appropriate for addressing alterations in the
consumption and providing ancillary services to the electricity system, thus maintaining the balance
between the electricity supply and demand.

6. Hydroelectricity helps fight climate changes.

11

The hydroelectric life cycle produces very small amounts of greenhouse gases (GHG). In emitting
less GHG than power plants driven by gas, coal or oil, hydroelectricity can help retard global warming.
Although only 33% of the available hydroelectric potential has been developed, today hydroelectricity
prevents the emission of GHG corresponding to the burning of 4.4 million barrels of petroleum per day
worldwide.
7. Hydroelectricity improves the air we breathe.
Hydroelectric power plants don't release pollutants into the air. They very frequently substitute the
generation from fossil fuels, thus reducing acid rain and smog. In addition to this, hydroelectric
developments don't generate toxic by-products.
8. Hydroelectricity offers a significant contribution to development.
Hydroelectric installations bring electricity, highways, industry and commerce to communities, thus
developing the economy, expanding access to health and education, and improving the quality of life.
Hydroelectricity is a technology that has been known and proven for more than a century. Its impacts are
well understood and manageable through measures for mitigating and compensating the damages. It offers
a vast potential and is available where development is most necessary.
9. Hydroelectricity means clean and cheap energy for today and for tomorrow.
With an average lifetime of 50 to 100 years, hydroelectric developments are long-term investments
that can benefit various generations. They can be easily upgraded to incorporate more recent technologies
and have very low operating and maintenance costs.
10. Hydroelectricity is a fundamental instrument for sustainable development.
Hydroelectric enterprises that are developed and operated in a manner that is economically viable,
environmentally sensible and socially responsible represent the best concept of sustainable development.
PROPOSED SOLUTION

12

DoE Approves Hydropower Project in Northern Luzon

The Philippines is on its way to strengthening the countrys Renewable Energy (RE) industry as the
Department of Energy (DoE) signed another service contract last week approving the new 600 Megawatt
Hydropower project to be built in the watershed cradle of Northern Luzon.
The hydropower facility, which would be developed in the twin rivers of Apayao and Abulug in the Cordillera
Mountains, was proposed by the Pan Pacific Power Corporation.
Although the RE service contract for the project has been pre-signed already, it was only formalized after
Pan Pacific was able to pass all of the financial, legal and technical criteria that DoE imposes on RE
developers.
The project was initially launched in October 2009 but the projects full capacity is yet to be determined
based on the hydrologic studies that will be furthermore conducted by Pan Pacific. However, it has been
estimated that merits on investments will range from $1.2 billion to $1.5 billion.
The energy department aims to sign at least eight RE service contracts before the year ends and this
hydropower facility is actually the second project which was able to secure the approval of DoE in the
hydropower development domain. The other one is in the Quirino province and was proposed by Gem
Holdings Inc.
Solutions to Power Problem in Mindanao Almost Done

The Mindanao grid may soon have sufficient power supply as the maintenance repairs on several
hydropower plants of the National Power Corporation (NAPOCOR) in the region are almost done.

13

According to Department of Energy (DoE) undersecretary Josefina Patricia Asirit, the current shortage of
electricity in the Mindanao power grid will not worsen this summer, especially since the country is not
expecting any dry spell brought about by El Nio.
She said that the DoE officials, together with the representatives of the National Grid Corp. (NGCP), Power
Sector Assets and Liabilities Management Corp. (PSALM), National Electrification Administration (NEA)
and various Mindanao-based electric cooperatives, have already met regarding the finalization of the
protocols that will be used to ease the load curtailment on the Mindanao grid.
NGCP on the other hand, stated that the particular daily power curtailment in the Mindanao Grid is not
because of any transmission issue but is entirely due to the severe power shortage in the region.
Furthermore, the power generated by plants is not enough to meet the demands of the customers who are
part of the grid.
Although the main source of electricity for the Mindanao grid is the Agus-Pulangui hydropower plant, DoE
said that there are still about 100MW power that has yet to be utilized.

What Government will do?

1. Development of publicly available database protocols and tools for hydropower resource
assessments.
2. Inclusion of Enhanced geothermal systems and Low enthalpy for Feed-in
3. Tariff Rates
4. Public-private partnership must be encouraged in the field of research, development and
demonstration for new technologies in resource exploration.

14

RECOMMENDATION
Philippine government will continue to ensure energy security by optimizing the use of hydroelectricity by
investment promotions and identification and implementation of sector reforms. Regulatory framework
should be long term, transparent, predictable and independently administered. Need to address
environmental and social acceptability issues by harmonizing the permitting process and intensifying efforts
to increase the level of awareness for hydroelectricity.

REFERENCE/S:
Del Mundo, Rowaldo, Edna Espos and Maria Isabel Rodrigues Gonzalez. 2011. Philippine Electric Power
Industry Market and Policy Assessment and Analysis of International Markets. University
of the Philippines (UP)-National Engineering Center and UP Engineering Research and Development
Foundation, Inc., Quezon City.
Department of Energy (DOE). 2012. Distribution Development Plan 2010-2019.
January 2012 release.
Dombrowsky, Ines. 2009. Revisiting the potential for benefit sharing in the management of transboundary rivers. Water Policy 11: 125-140. World Water Council.
http://www.sciencekids.co.nz/sciencefacts/energy/hydropower.html
The Philippine Power Crisis: ProposedSolutions from the Academe
Eduardo Luis Barros FernandezDepartment of Energy
Union Issues in Privatization of Agus-Pulangui Hydropower Complex
Violeta P. Corral, Public Services International Research Unit www.psiru.org
October 20