DOE lists measures to meet power requirements

THE Department of Energy (DOE) has issued a short-list of stopgap measures to help meet the country’s power requirements this year. Energy Undersecretary Josefina Patricia Asirit said Luzon, which is projected to suffer from insufficient generating capacity and demand growth, would draw excess power from the Visayas to help augment its electricity supply.

”The excess capacity of around 200 megawatts, on a normal environment or situation, can be sent to Luzon from the Visayas. But it could be more if the peak demand of the Visayas grid is less than projected,” she said.

Luzon and Visayas are the only islands, among the three major island groups of the Philippine archipelago, which are connected through the Leyte-Luzon high voltage direct current link of the National Grid Corp. of the Philippines (NGCP), the power grid’s operator.

According to data from the Energy department, Luzon needs an additional 300 megawatts during the summer months to meet the mandated 23.4-percent power reserve margin for the estimated 7,900-megawatt demand this year.

Visayas, on the other hand, will have a better condition this year with new plants ready for use by March, after suffering from tight power supplies last year.

The said plants are the 240-megawatt and 160-megawatt coal facilities of Cebu Energy Development Corp. and Panay Energy Development Corp. of the Metrobank Group, as well as the 200-megawatt coal unit of the Kepco-Salcon Power Corp.

Also contributing to the improvement of power supplies in the region is the operation of the Wholesale Electricity Spot Market (WESM) in Visayas which started in December 2010.

The WESM is a trading platform for electricity between generating companies and customers such as power distribution utilities and industries.

As a spot market, electricity is traded at the WESM on a real time basis or on the “spot” and, as such, prices are rendered volatile depending on market conditions in contrast to bilateral power supply contracts where prices are pegged over a certain period. This gives power companies and even establishments with their own generators an alternative market where they can sell their uncontracted capacities.

On January 14, the power spot market’s operator, Philippine Electricity Market Corp. (PEMC) had its first participants meeting in Cebu where reports indicated improvement in the Visayas grid largely because of the contribution of embedded generators, new power plants undergoing testing and commissioning and supply coming from Luzon.

In relation to this, PEMC also reported that manual load dropping incidents, or power interruptions, have decreased in the Visayas because of the increased supply and low demand in the region.

Meanwhile, the department is already coordinating with the National Power Corp. to look for alternative power sources for Mindanao such as power barges from Visayas or Luzon, to replace a hydroelectric power plant that will undergo maintenance in March.

The department, however, projected that Mindanao’s situation will be better than 2010 since the current water level in the region is higher because of the La Niña phenomenon the country is experiencing.

Last year, the impact of El Niño on Mindanao’s reservoirs severely affected the operations of hydroelectric power plants, which provide more than half of the region’s power supply during normal weather conditions.

Meanwhile, the department said that it will form a technical team to monitor compliance by generation companies and the NGCP in terms of grid operation and maintenance and other requirements through “on site” visits of generation companies and regular dialogues with all key stakeholders such as electric power industry participants, business groups and local governments.

”The [d]epartment will also conduct investigations whether there are market implementations or issuance that discourage available capacity being offered in the electricity spot market,” it said.

The department also plans to formulate penalties and incentives with the Energy Regulatory Commission to encourage stakeholders in observing reliability standards and practices. –EUAN PAULO C. AÑONUEVO, Manila Times