Distributed Energy Resources
1. Distributed Energy Resources (DER) Overview
Distributed Energy Resources (DER) are power sources connected to the distribution system or electrical system of end-users that could be aggregated to meet demand for energy.
On 29 November 2022, the Energy Regulatory Commission (ERC) Resolution No. 11, Series of 2022, “A Resolution Adopting the Rules Governing Distributed Energy Sources (DER)” also known as the “DER Rules”, was published in a newspaper of national circulation and took effect on 14 December 2022.
The DER Rules cover three (3) types of installations:
- 1. DERs utilizing renewable energy (RE) sources for end-user systems connected on-grid and are meant for consumption and export, with nameplate capacity* of greater than 100kW up to 1MW, but maximum capacity to export capped at 30%;
- 2. DERs utilizing renewable energy (RE) sources for end-user systems connected off-grid and are meant for consumption and export, with nameplate capacity not greater than 1MW, and maximum capacity to export also capped at 30%; and
- 3. DERs utilizing any energy generation and storage technology, whether on- or off- grid, and meant for end-user consumption only, so long as the DER owner and end-user are not the same entity.
Technologies such as microgrids, electric vehicles (EVs), Net-metering, stand-alone battery energy storage systems, etc. that are covered by other regulations are not covered by the DER Rules.
*Nameplate capacity refers to the maximum rated output of an electric power equipment
2. Compensation Methodology for DER Export Energy
For on-grid Renewable DER, the DU will compensate the exported energy based on the DU’s monthly blended generation rate, in relation to its DER’s rated capacity, computed as follows:
- a. 100kW to 500kW: 75% of the blended generation rate
- b. Above 500kW to 1MW: 60% of the blended generation rate
3. Eligibility to Join the DER Program
All customers with good credit standing in the payment of their electric bills and new customers are qualified provided the DER system falls under any of these types:
- 1. DERs utilizing renewable energy (RE) sources for end-user systems connected on-grid and are meant for consumption and export, with nameplate capacity of greater than 100kW up to 1MW;
- 2. DERs utilizing renewable energy (RE) sources for end-user systems connected off-grid and are meant for consumption and export, with nameplate capacity not greater than 1MW; and
- 3. DERs utilizing any energy generation and storage technology, whether on- or off- grid, and meant for end-user consumption only, so long as the DER owner and end-user are not the same entity.
4. DER Application and Installation Process
For end-user consumption and exporting Renewable DER, upon completion of all documentary requirements, payment of the fees, installation of all necessary electrical assets, and securing of all the certificates and permits Meralco will then replace the existing meter with a bi-directional meter, install a REC meter, and do testing and commissioning activities of the RE system. Upon release of the Certificate of Compliance (COC) with the Energy Regulatory Commission (ERC) will you then be able tosafely use and benefit from your DER installation.
For purely end-user consumption DER, the process is the same, with the exception of the replacement of the existing meter with a bidirectional meter, as there is no excess energy that will be exported to the grid.
To find out more about DER, call our business hotline: 16210. Applicants can also go to the nearest Business Center or contact Biz and E&N Relationship Managers to inquire about DER.
6. DER Benefits for Businesses
A customer availing of the DER program, whether for its own use and export or own use only, will reduce its dependence on grid power, hence, will benefit from the lower cost of electricity generated by its DER facilities for his own consumption. Moreover, if the energy generation of the DER facility is more than the customer’s requirements, the excess is exported to the grid if it is enrolled to both the own-use and exporting DER program.
When a customer avails of the End-User’s and exporting Distributed Energy (DER) program, Meralco will install in the customer's premises a bi-directional meter that will measure the energy consumed (import) and the energy supplied (export) by the customer to the distribution grid. Meralco will likewise install a REC (Renewable Energy Certificate) meter that will measure the gross electricity production from the RE system.
For a business with photovoltaic (PV) energy source, when there is sunshine during the day, the solar facility is intended to supply a portion of the energy needs of the customer while any excess energy will be exported to the grid. Per DER Rules, exported energy from a maximum of 30% of the nameplate capacity of an RE system will be compensated, allowing the business to recover from its renewable investment faster while helping boost overall energy supply into the grid. At times when there is no sunlight, or at night, the grid will provide electricity to supply the customer’s full power requirements. Exported and imported energy are measured by the bi-directional meter.
The REC meter will measure energy generation from RE-based facilities under DER. Such generation will be entitled to RECs, upon registration of the facility with the RE Market. RECs may be sold to other RE Market participants.
To get the total electric bill, the value of the energy exported by the customer will be subtracted from the value of the imported energy from Meralco. On the other hand, for a customer enrolled in the DER for End-User’s consumption only, the total electric bill shall be the amount computed corresponding to the much lower import consumption.
Aside from the compensation provided by the DER Rules to the excess energy exported by RE systems, applying for DER ensures that the RE installation is compatible with the power grid and complies with interconnection standards for safe and reliable operations. Registration of DER with Meralco will also enable customers to earn RECs, which may be sold to other RE Market participants.
On a national level, participation in DER aids in the development of RE resources to reduce dependence on imported fossil fuels and assists in the thrust for more sustainable sources of energy.
7. Safety Benefits of Registering RE Installations with Meralco
If Meralco is unaware that you have an RE installation, you put yourself and others at the risk of:
- Inaccurate billing
- Electrical fires
- Neighborhood blackouts
- Damage to motors and electrical equipment
- Grid instability
- Service interruption
- Electrocution of power utility personnel
In addition to these, the ERC requires securing a COC prior to the operation of a renewable DER facility. And, registration of DER with Meralco will also enable you to earn RECs, which may be sold to other RE Market participants.
8. Hosting Capacity for DER
For DER Applications requesting for connection to Meralco’s feeders with primary voltages of 13.8 kV or 34.5 kV, determination of available hosting capacities is subject to current loading of the feeder including the distribution transformer and existing embedded generating facilities connected to it. Thus, a Distribution Impact Study (DIS) must be conducted to evaluate the impact of a DER application before it can be allowed to connect to any Meralco feeder as prescribed in the DER Rules and the latest Philippine Distribution Code.
For initial reference, but subject to the conduct of the DIS, the total aggregate capacity of embedded generators allowed for interconnection to Meralco’s distribution system should not exceed 8 MW and 3 MW for feeders operating at 34.5 kV and 13.8 kV, respectively.
