Government to require gencos to sell 70% of power plant capacity

By Lenie Lectura – May 16, 2019
from Business Mirror

POWER generation companies (gencos) will soon be required by the Department of Energy (DOE) to sell up to 70 percent of their power facilities’ capacity to distribution utilities (DUs) and allot the remaining 30 percent for other purposes.

“As a way forward, we have to encourage power plants to be well maintained and we’re looking at a 70-percent cap of contracting with DU so that they can have more power available for replacement, ancillary service and for spot market,” said Energy Undersecretary Felix William Fuentebella.

The energy official explained that this proposed policy would somehow help the gencos to properly plan how to distribute their capacity. Fuentebella also allayed fears that 30 percent of a power plant’s capacity would be shaved off from the grid if realigned as replacement power, ancillary service and spot market purposes.

“The 30 percent would still be there. It’s just that it’s no longer attached entirely to the DU,” he said.

This suggestion would be in form of a department circular, the draft of which could be issued next month. Public hearings would have to take place before the proposed policy is finalized and signed by Energy Secretary Alfonso G. Cusi.

“It is now being drafted. Hopefully, it will be out soon,” said Fuentebella.

A check with the Energy Regulatory Commission revealed that there are no existing standards in place yet as to the ratio of supply allocated by a power firm to its customer. This proposal comes after a series of yellow and red alert warnings issued in the Luzon grid since March this year. The said alert notice, at times, led to rotational power outage for at least an hour.

The National Grid Corp. of the Philippines (NGCP) issued a yellow alert notice from 9 a.m. to 4 p.m. in Luzon due to thin power reserves.  Available capacity stood at 11,845 megawatts as against a peak demand of 11,214MW.

The DOE reported on Wednesday that two power plants are still on forced outage. These are the 60MW Bacman Energy Inc. Unit 1 and the 345MW GNPower Mariveles Coal Plant Ltd. Co. (GMPC) Unit 1.

Also, the capacity of several power plants was derated due to technical glitches. These are SEM-Calaca Power Corp.’s (SCPC) unit 2, from 300MW to 200MW; Pagbilao Energy Corp.’s (PEC) Unit 3, from 420MW to 370MW; SMC Consolidated Power Corp. (SMCCPC) Limay unit 2, from 150MW to 120MW; Angat Hydropower Corp.’s (AHC) Unit1-4, from 200MW to 28MW; First Gen Hydro Power Corp.’s Pantabangan plants 1 and 2, from 120MW to zero; SN Aboitiz Power Inc.’s Magat hydro plant units 1-4, from 380MW to 80MW; and SN-Aboitiz Power Inc.’s Ambuklao hydro plant units 1-3, from 105MW to 35MW.

Fuentebella added that the yellow and red alerts might persist in the next three months because demand for power is expected to peak next week.

“The causes of yellow alert are high demand and unplanned outages. Projection wise, this will end around September. We are inviting more investors in the power sector to enhance competition,” he said.