Luzon power supply to remain tight in 2016

by Myrna Velasco – December 27, 2015

from Manila Bulletin

The main grid of Luzon will remain tight next year – and the biggest challenge for the electricity sector is ensuring that the scheduled May presidential elections will not be marred with rolling brownouts.

In a briefing with reporters, Manila Electric Company (Meralco) President Oscar S. Reyes has reckoned that supply in the grid will still be wobbly by 2016, hence, the utility firm is already cornering supply contracts for its peaking needs.

“This is the reason we’re doing this (Meralco’s contracting of peaking supply),” he stressed, while emphasizing that the utility firm’s bigger scale and long-term contribution to power supply security will be its investments in power generation.

He indicated though that aside from contracting of capacity needs, the scheduling of maintenance shutdowns of power plants will similarly be crucial – especially so since power generation companies are prevented from doing these during the summer months and the election period.

Reyes said the industry learned tough lessons from the November-December 2013 distressful events in the industry, thus, players are now more circumspect when it comes to the downtime of their generating facilities.

Similarly, Meralco is wishing for minimized forced outages of power generating units – primarily the old fleet because they could trigger unwarranted tightness in supply or even power interruptions if not managed expeditiously.

There are anticipated capacity additions for Luzon next year, but these would still not be enough to ensure a relatively stable supply for the biggest power grid.

Reyes noted “the market is changing and demand is growing – and demand will continue to grow.”

Given the combined economic and population growths penciled in by government planners, it has been noted that Luzon grid will be in need of new power plants every year – at least the capacity range of 270-300 megawatts.

“Assuming it’s a 2.5% growth – that’s about 270MW growth in the Luzon grid – that’s almost one power plant a year – it’s one 300MW plant a year – that’s notwithstanding de-rating and retirement of power plants,” Reyes said.