Govt orders review of power companies

by Alena Mae S. Flores – August 04, 2016 at 11:30 pm

from Manila Standard Today

The Energy Department will review the standards used by power generation companies in running their plants amid the thin reserves in the Luzon grid in the past several days.

Energy Secretary Alfonso Cusi directed the department to assess whether there were enough measures or standards to ensure the power plants were always in good condition and able to meet their obligations to their respective customers.

The department noted that the lack of power supply since last week was due to the forced outages of several generating plants in Luzon.

“We are keen on improving the power supply situation in the country. We will strengthen the policies and programs and we will work with the Energy Regulatory Commission to ensure that all standards are enforced to ascertain reliable, stable and reasonably priced electricity, because we cannot let the people suffer from power interruptions,” Cusi said.

The department is looking into the provision of replacement power for contracted capacities and the creation of technical audit teams to assess the operations and contracts of generation companies and distribution utilities.

System operator National Grid Corp. of the Philippines on Thursday placed the power supply situation in Luzon in yellow alert status following the forced or unplanned outage of various plants totaling 1,297 megawatts.

These power plants include the 50-MW Angat Main Hydropower Plant Unit 4, the 180-MW Kalayaan Hydroelectric Power Plant Unit 1, the Makban Geothermal Power Plant Unit 1 and Unit 10 with a combined capacity of 83 MW, the 60-MW Limay Cogeneration Plant Block 5, the 382-MW Pagbilao Coal-Fired Power Plant U2, the 122-MW South Luzon Thermal Energy Corp. Coal-Fired Power Plant Unit 1, 280-MW Malaya Thermal Power Plant Unit 1 and the 140-MW Southwest Luzon Power Generation Corp. Coal Fired Power Plant Unit 2.

Power plants on planned maintenance shutdown are the 180-MW Kalayaan Unit 2, 265-MW Sta. Rita Unit 2, the 55-MW Bacman Geothermal Power Plant and the 600-MW Ilijan Natural Gas Power Plant Block B.

Luzon’s system capacity stood at 9,805 MW on Thursday, while the system peak demand is projected to reach 9,128 MW at 11 a.m., leaving the reserve capacity at 364 MW.

Visayas and Mindanao grids, however, are operating on normal condition.

“The DoE also reiterates its call to the public to judiciously manage energy consumption as this matter is better resolved with everyone’s cooperation,” it said.

Power companies, meanwhile, said they should not be penalized for outages experienced in the grid.

“When plants come down, they in effect are penalized in the sense that they are not able to earn from their assets. And maybe, some of them have to cover the commitments that they have with their offtakers. In effect, they’re penalized, because when spot market prices go up because of shortage, a lot of the buyers or people paying the higher price are generators themselves, who have to cover their commitments,” Aboitiz Power chief executive officer Erramon Aboitiz said.

He said the best way to minimize yellow or red alerts was to attract more capacity “and the way to attract capacity is to make it easier for investors to come in.”

“And once you have enough capacity, I think competition will bring down prices. It’s really a cycle one has to follow. I don’t think there’s a quick solution to solving power supply, in solving the price of electricity,” he said.