No new power projects committed

Amid increase in demand


By Myrna M. Velasco – April 9, 2019, 10:00 PM
from Manila Bulletin

Despite the string of yellow alerts or thinning power reserves straining Luzon grid to breaking point, the Department of Energy (DOE) has an alarming list of “scant or deficient” and almost no new committed power projects beyond the plants that are now under construction and due for commercial commissioning between this year until 2021.

Department of Energy (DOE) logo

Department of Energy (DOE) logo

Supply in Luzon grid, in particular, is already on catch-up mode given the well-observed uptick in demand because of the aggressive infrastructure development build-up of the Duterte administration on its “Build, Build, Build” economic paradigm.

Based on documents obtained from the DOE, it was shown that its list of committed power projects just include the 150-megawatt Phase 2 of the Limay coal-fired power project of the San Miguel group; the 300-megawatt Masinloc coal-fired power project also of San Miguel group; the 500MW San Buenaventura coal-fired facility of Meralco PowerGen and Thai firm EGCO which is due to come on-line this year; and the 1,336MW Dinginin coal-fired power project of Aboitiz and Ayala groups.

It is worth noting though that with the pace of power demand growth in Luzon grid, these ongoing power projects may only be able to meet the needs of the system at the targeted ‘meeting point’ of supply-demand by year 2022 – including the provision for reserves or ancillary services.

Included in the energy department’s roll also are the 1,200MW Atimonan coal-fired power project of Meralco PowerGen; and the 600MW Redondo Peninsula (Subic) power project, which is also of Meralco PowerGen and partners Aboitiz Power and Taiwan Cogeneration Corporation. For the Atimonan and Subic power ventures, however, these are currently hurdled with streak of legal and regulatory issues and have been facing opposition from various advocacy groups – and there’s no certainty on when they can actually take off from project blueprints.

The rest are just various renewable energy projects but of very marginal capacities: Including geothermal for 31MW capacity; solar projects for 115MW; and hydropower for 22.6MW capacity.

Another one in the list is the long-delayed 600MW liquefied natural gas (LNG) power project of Energy World Corporation (EWC) – which had been expected by the DOE to have reached commercial operations as early as 2015; but the actual date for it to be on stream has yet to be affirmed anew by the department.

According to industry players, there are practically no new project commitments beyond the power needs of the industry beyond 2022 because of the regulatory overhang of the several power projects still not decided by the Energy Regulatory Commission (ERC).

And if the DOE will not step up on its planning adjustments and if the ERC could not break regulatory lag on its decisions, there is a very high probability that the Duterte administration will be committing the country to another round of power crisis.

For most of the players in the industry, including those affiliated with the Philippine Independent Power Producers Association, Inc. (PIPPA), they are just hoping that the completion of the targeted Mindanao-Visayas Interconnection Project (MVIP) will be concretized by 2020 so sharing of capacity could be made feasible on a nationwide basis.

It has not be to be sidestepped though that many of the power generating facilities of the country are of old fleets, hence, the recurrence of forced outages may become an unwanted trend in the power system.