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Integrating Renewables at Low Voltages:Meralcos Experience at Deploying the Net Metering Scheme

A.A.R. , ANNA MARIA ABELARDO REODICA

Manila Electric Company (MERALCO)

Philippines

AORC Technical meeting 2014C4-1123

http : //www.cigre.org


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SUMMARY

Five years ago, the Renewable Energy (RE) Act of the Philippines was passed into law. With

the objective of accelerating the exploration, development and utilization of Renewable

Energy resources, the countrys Renewable Energy Act was considered as one of the most

comprehensive RE legislations. Its enablers combine both fiscal and non-fiscal incentives.

Major policy mechanisms promoting Renewables in the country include the Feed-in Tariff

(FIT), Renewable Portfolio Standards (RPS), Net Metering and the Green Energy Option.

One main driving force of the Act was the creation of an inter-agency advisory body, the

National Renewable Energy Board (NREB), which facilitated policy formulation and rule-

making to implement the law. Since the enactment of the law, only two Rules have been

promulgated, the Feed-in Tariff (FIT) in 2010 and the Net Metering Rules in 2013. And to

date, only the Net Metering Rules have been implemented.

With Meralco as the largest Electric Distribution Utility in the country, it leads in the

deployment of its Net Metering Program. It has been able to prepare its systems long before

the Net Metering Rules took effect in July 2013. Its involvement in policy formulation since

2009 has enabled it to build capacity and understand the technical and administrative

requirements in rolling out the Program.

Foremost in its preparations is ensuring the integrity and protection of its distribution network

with the introduction of new and non-traditional sources of electricity generation, commonly

known as Variable Renewable Energy (VRE), i.e. solar and wind. Meralco has enforced that

each Net Metering application goes through a technical feasibility test or the Distribution

Impact Study (DIS) before interconnection. This study will ensure that the parallel generation

from its customers will preserve the integrity and reliability of the network, and therefore, will

not create any disturbance to the delivery of its service to the rest of the customers.

Another challenge, which is specific to Net Metering, is the integration of dispersed and

small-scale generation located at the end-use or low voltage levels, also known as DistributedGeneration. Under the Philippine regulation, the mandate for Distribution Utilities like

Meralco, is to provide for the commercial and technical arrangement that will allow for a two-

way flow of electricity. Aside from developing the technical standards for interconnection, the

utility needs to prepare for the commercial and operational aspects of accommodating bi-

directional flow of power and the compensation of customers for any export energy delivered

back to the utility.

Meralco has already energized and billed a handful of Net Metering customers. While it

enhances the operational aspects and technical standards of integrating renewables in its

distribution network, the entire process is still a continuing work in progress.


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The Company keeps up to the mandate of the law in its role as a Distribution Utility

supporting the countrys transition towards a sustainable energy future.

KEYWORDS

Renewable Energy Solar PV Net Metering Distributed Generation


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1. Introduction

The Philippine Energy Environment transitions towards sustainability

The Philippines is endowed with abundant renewable energy resources, including solar,

biomass, wind and geothermal and hydro. Compared to its Asian neighbours, the countrysrenewable energy share is relatively high due to the advanced development of its geothermal

sector, contributing close to 15% of its total power mix in 2012. In the global scene, the

Philippines, next to the United States, is recognized as the second largest producer of

geothermal power.

**Source:DepartmentofEnergyPhilippinePowerStatistics2012

The Renewable Energy (RE) Act of 2008

The countrys energy requirement has grown at an average of 4 % over the past 10 years and

more rapidly in the past 5 years. While current energy supply is still dominated by coal and

natural gas, contributing 39 % and 27 % (2012) respectively, the Philippine energy marketaims to move towards less dependence from fossil-fired fuels and transition towards

alternative and sustainable indigenous renewable energy sources. This policy direction paved

the way for the enactment of the Renewable Energy (RE) law in 2008 after two decades of

deliberation at the legislative body. It has been considered as a landmark legislation and one

of the most comprehensive laws promoting the exploration, development and utilization of

Renewable Energy resources.

The Philippine RE law combines both fiscal and non-fiscal incentives to encourage renewable

energy production in the country.

Major non-fiscal policy mechanisms promoting Renewables in the country include the Feed-in Tariff (FIT), Renewable Portfolio Standards (RPS), Net Metering and the Green Energy


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Option.

The enabling policy environment was complemented by a moving force with the creation of

an inter-agency advisory body, the National Renewable Energy Board (NREB), which

facilitated policy formulation and rule-making to implement the law. However, since the RE

law took effect in 2009, only two Rules have been promulgated, the Feed-in Tariff (FIT) in2010 and the Net Metering Rules in 2013. And to date, only the Net Metering policy

mechanism has been implemented.

The two policy mechanisms, FIT and Net Metering, are differentiated from each other in

terms of scale and applicability. FIT, which is the guaranteed payment for generation from

renewable resources, applies to RE developers and usually are bigger in scale, in the mW

capacity. Meanwhile, the Net Metering scheme applies to end-users and is deployed in the

kW level.

II. A Policy Mechanism: NET METERING in Focus

The Net Metering Rules, issued by the Energy Regulatory Commission (ERC), came into

effect on July 24, 2013. As provided under the law, (Renewable Energy Act, section 10)

Distribution Utilities (DU) s.a. MERALCO shall make available its systems, both technical

and commercial, and without discrimination to accommodate qualified end-users entering into

Net Metering arrangement with the utility.

Under the law, Net Metering is defined as "a system, appropriate for distributed generation, in

which a distribution grid user has a two-way connection to the grid and is only charged for his

net electricity consumption and is credited for any overall contribution to the electricity grid".

(RE Act, Section 4 gg).

The scheme allows a customer to install an on-site renewable generating facility for its own

use and may sell any excess generation to the grid operator.

The paradigm shift from the traditional one-way flow of electricity, from the utility to the

customer, towards a bi-directional flow is one key characteristic of the scheme. The customer

continues to draw power from the utility but at the same time participates as a power supplier,

interconnected at the low voltage distribution network or the household voltage.

Types of RE generation eligible to participate in the Net Metering include solar, wind,

biomass or biogas energy systems not exceeding 100kW in power generating capacityinstalled on-site within the customer's premises.

Physical set-up (Metering)

Under the Philippine regulatory framework for Net Metering, two meter registrations will be

measured, one to capture the import energy, or power drawn from the Utility and another one

to measure export energy or the excess energy generated beyond the customers own

consumption. The distribution utility has the option to install either a two (2) uni-directional

meter set-up or a single bi-directional meter providing flexibility to consider cost and

capability of the utility. The process established for Meralco has the 2-meter default set-up

with the primary consideration for economic cost. The meter hardware, including theassociated facilities and programming cost to enable the functionalities required for the single


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bi-directional meter set-up time is currently twice more expensive than the 2 uni-directional

meter.

Commercial Arrangement

Billing settlement is based on the two (2) meter readings. Import energy registrationis calculated based on the full retail rate of the Distribution utility, reflecting cost to deliver

electricity from upstream generation through the transmission network down to the

distribution level. Meanwhile, exported energy from end-use generation of the customer is

compensated at the average generation cost of the Distribution utility since energy is

delivered nearest the point of use.

The customer still receives a single billing statement containing a bill calculation based on the

2 meter readings. Final bill amount is the difference between the Import and Export billings,

which could either be an amount payable to Meralco or an amount creditable to customers

future billings.

III. A Utilitys Experience at Deploying the Net Metering Program

A. Meralcos Preparations for Interconnecting end-use parallel generation

Technical Preparation

Even before connecting its first Net Metering customer, Meralco has installed its own roof-

top solar PV system interconnected at the low voltage lines. The 6.16 kW solar PV system

powers a load center, whose size represents a typical household installation. One of the

primary objectives of the study is to serve as a test bed for Meralco personnel to observe the

behaviour of the various system parameters with the interconnection of a generation facility at

the low voltage network.

Based on the Guidelines established for the Interconnection of RE Generation facilities to the

DUs distribution System (Interconnection standards, Annex A-1 of the Net Metering Rules),

Meralco monitored the following system parameters and observed compliance with System

Protection Standards:

1. System Parameters. The RE facility must perform within the operating system

standards of the Distribution Utility. The system parameters monitored include voltage

level, frequency, Power Quality (Limitation of DC Injection, Flicker severity,harmonics) and Power Factor.

2. System Protection. The customer shall be responsible for providing adequate

protection for its facility under any operating conditions. Compliance with protection

standards include installation of automatic synchronizing devices, anti-islanding

features, integration with the Distributions system grounding and other protective and

control devices, including a visible disconnect switch, protective relays and reclosing

device.

Over a period of nine (9) months of observation, the facility has operated within all the

technical standards. It only failed to comply with one protection standard, the reclosing time,


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during a simulated test interrupting the supply of the Solar PV system to the grid. However,

this aspect has been corrected with a programming adjustment made at the inverter.

Another equally important objective of the Meralco Pilot Project is to test the Net Metering

concept of a two-way flow of electricity. The 2 options for metering set-up, a single bi-

directional meter and a 2-meter uni-directional set-up, have been installed in parallel. Bothmetering set-ups were capable of capturing both import and export energy registrations.

Commercial Arrangements and Administrative Processes

When the Net Metering Rules took effect on July 24, 2013, Meralco was ready to accept

applications for Net Metering arrangements with its customers. It has actively participated in

the policy and rule making activities of the National Renewable Energy Board as early as

2009 when the board was established. It has gained full understanding of the policy

mechanism and has built capacity for its personnel initially involved in the implementation.

Meralco developed its Net Metering application process grounded on the combined three (3)policy and regulatory Guidelines governing its implementation. These are the RE Law or the

Renewable Energy Act of 2008, its Implementing Rules and Regulations (IRR) and the Net

Metering Rules, promulgated by the regulatory body, the Energy Regulatory Commission.

B. MERALCOs Net Metering Application Process

Accommodating applications for Net Metering begins with a letter of Intent from the

customer and the filing of the Application form, indicating details of the generation facility.

A critical next step is the Distribution Impact study (DIS) or the technical feasibility test

that will evaluate that the customers generating facility can be accommodated and is

synchronized with the Utility's technical operating standards. The grid operator needs to

protect the integrity and reliability of its distribution network with the introduction to its

system of a new and non-traditional source of generation, i.e. solar and wind, commonly

known as Variable Renewable Energy (VRE). Meralco has enforced that each Net Metering

application goes through this technical feasibility test before interconnection.

Included in the Distribution Impact Study are the following tests, the scope of which may

vary depending on the specific system conditions of the Net Metering applicant.

Circuit Modelling

Load Flow and Short Circuit Analysis

Voltage Study

Verification of Penetration Limit

Field Verification of Existing Secondary Distribution

Load Profiling

Measurement of Baseline System and Power Quality Parameters

This study will confirm that the parallel generation from the customer can be accommodated

while maintaining the reliability and integrity of the network, and thus, will not create any

disturbance to the delivery of DUs service to the rest of the customers.


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After the customer passes the hurdle of the technical evaluation phase, the DU finalizes the

design of the interconnection facilities. When these interconnection facilities have all been

installed, the project agreement between the customer and the Utility is signed. Application

process concludes with the testing and commissioning of the generation facility before the

actual energization.

The following chart illustrates the step-by-step process for Net Metering Application.

C. Lessons Learned and Challenges

The experience gained from installing its own Solar PV system as a test bed in a controlled

environment provided a level of comfort for Meralco especially on the technical aspect ofdeploying Net metering program to its customers.


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A cross-functional working team composed of experts from various offices in Meralco

(Metering, Distribution Connection Standards, Customer Service Process, Net Asset Planning

and Regulatory Management) collaborated to develop the Net Metering Process and

Standards for Interconnection.

It cannot be denied that while integrating this distributed generation at the low voltage lines is

something new to Meralco, its personnel especially the frontline offices and back-end support

continue to build capacity. The Application process remains to be a work in progress but

acknowledging that each encounter becomes a valuable learning experience.

Ensuring compliance with technical standards for interconnection remains paramount to

ensure a secured and reliable distribution network.

IV. Moving Forward

With the steadily falling costs of solar power equipment and the entry of suppliers andintegrators from the international market as well as the growing awareness, solar PV systems

are increasingly becoming popular with consumers. Gauging from the Net Metering

applications received by Meralco and the visible solar rooftop installations across the

country, a niche market from residential customers from upscale villages and commercial

establishments has been observed. Whatever drives the market for more solar PV system

installations, whether it is for energy efficiency or mitigation of high grid electricity prices or

green initiative, there are indications for an increasing adoption rate in the market.

What needs to be addressed is the establishment of standards for installers and equipment.

There are not enough safeguards for the protection of customers that the generating system

will perform within established operating standards and expected life.

Meralco continues to monitor these end-use generation sources and their impact on various

aspects of the operation of the distribution system. Operational impacts related to forecasting,

dispatch protocol, energy sourcing plan of variable renewable energy sources and establishing

penetration limits for distributed generation certainly need further study.

The Net Metering scheme empowers the customers to find ways of sustainable and efficient

ways of sourcing their power requirements. Meanwhile, Meralco keeps up to its mandate of

providing continuous and reliable electric service while making its systems ready to the new

challenges of the evolving power industry.

References:

Republic act 9513: Renewable Energy Act of 2008 An Act promoting the Development,

Utilization and commercialization of Renewable Energy Resources and for other Purposes

Department of Energy Circular no. DC2009-05-0008, Rules and Regulations

Implementing Republic Act 9513


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Energy Regulatory commission, Resolution No. 09, Series of 2013, A Resolution Adopting

the Rules Enabling the Net-Metering Program for Renewable Energy

Annex A-1 Net Metering Interconnection Standards

Net-Metering Reference Guide, How to avail Solar Rooftops and other Renewables below100kW in the Philippines, Publication of the DOE in cooperation with NREB and supported

by the Federal Ministry of Economics and Technology

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