‘Market emergency’ gives priority to hydro plants

The Department of Energy (DoE) will require the local electricity spot market to sell electricity from hydroelectric plants ahead of any other generating plants under a “market emergency” it declared until Friday as part of preparations for typhoon “Quiel” which entered the country on the heels of typhoon “Pedring” that dumped huge volumes of water on the country’s dams.

Energy Secretary Jose Rene Almendras told reporters that DoE has issued Circular 2011-09-0009 that will allow the country’s largest hydropower facilities to operate as “must run” units.

Almendras said the circular is supposed to be good until Friday, depending on the weather and the status of the dams.

“What we’re doing is we’re declaring a market emergency to allow National Grid Corp. of the Philippines and the wholesale electricity spot market (Wesm) to automatically dispatch a hydropower facility that would want to offer its power to market,” Almendras said.

“We have determined that there are a number of dam reservoirs with water elevation levels reaching their limit. And there’s a need to reduce the water levels in anticipation of another typhoon. What usually happens water is released from the dams once the flood subsides. It would be a waste to release the water in the dams without using it,” he said.

The circular stated based on the department’s consultations with Pagasa (Philippine Atmospheric Geophysical and Astronomical Services Administration) and various energy agencies, it is declaring an “emergency in the dispatch of power generated from the hydropower plants in Luzon” as a result of typhoon Pedring and in anticipation of typhoon Quiel.

It said that all hydropower plants in Luzon were directed to undertake necessary actions to ensure that water levels in their respective plants were safely released and within the safe levels.

“For this purpose, all hydropower generation plants in Luzon shall immediately inform the department and the National Grid if the water level in their plants has reached a critical level,” it said.

Almendras said hydro plants, which account for 1,320 megawatts (MW), were not required to be dispatched but “will be given priority dispatch” at the wholesale electricity spot market.

“We want to correct dam levels and generate power at the same time. We can use the water to be released to generate power and for them to correct their water levels,” the Energy chief said.

Almendras said government had to declare an “emergency” so that it haf the power to intervene in the power market.

“Under Section 9 of the Epira (Electric Power Industry Reform Act), allows me to do declare an emergency. It would have an impact on lowering prices,” he said.

Almendras, meanwhile, assured the restoration of damaged power facilities due to typhoon Pedring is ongoing.

Repair works are ongoing to restore electricity to three percent or less than 190,000 customers of Manila Electric Co., the country’s largest power distributor.

The National Electrification Administration, meanwhile, reported that more than 900,000 out of 1.2 million consumers were still without electricity.