DOE forecasts tight power supply in the Visayas grid

by Myrna Velasco – November 23, 2015

from Manila Bulletin

In the next two to four years, Visayas grid on its own will still be problematic when it comes to its need for capacity additions, according to the Department of Energy (DOE).

In a presentation to the Philippine Innovation in Infrastructure Congress hosted by the European Chamber of Commerce of the Philippines (ECCP), DOE acting assistant secretary Patrick Aquino has indicated that from “2018 to 2020, for Visayas supply and demand, there would be a gap.”

Nevertheless, he noted that the grid can benefit from its existing transmission interconnection with Luzon which is being propped with additional capacity on anticipated entry of new coal-fired and gas-fed power plants.

Mindanao, he added, will have a different fate and it could teeter more on “oversupply condition” – primarily kicking in next year.

If there is also a transmission system linkage between Visayas and Mindanao, he stressed that such overcapacity could be re-channeled to Visayas during tight supply periods.

The most immediate problem the government has to address when it comes to Mindanao supply will be the strike of El Niño phenomenon – that is until March next year and the succeeding summer months.

While new capacities will already be on-line by then, the “birth pains” of newly commissioned plants may still impact on its supply reliability as these facilities could still be very vulnerable to forced outages.

Reduced water elevation at Agus and Pulangui hydro plants will likewise continue to distress generation outputs, which conventionally is still a major supply source for the grid.

Recent studies cast for the power industry, however, portend that  “the lingering years of tight power supply condition in the country will finally ease with the entry of new base load power capacities from 2016.”

It has been emphasized that “the precarious power supply situation in the Philippines will improve over the coming years as the robust power project pipeline is gradually commissioned.”

There had been some period of under-investments in new capacity additions in the country in the last decade because investors then preferred to funnel capital into the acquisition of the National Power Corporation (NPC) assets.

That changed in the last five years as the regulatory environment for the sector had also improved over the years.