No power oversupply—Cusi

by Alena Mae S. Flores – November 06, 2016 at 11:50 pm

from Manila Standard Today

The Energy Department ruled out an oversupply of power and is preparing to implement an electricity market in Mindanao by June next year.

“There is no oversupply. It depends on who’s talking… I don’t believe there will be oversupply, not even Mindanao,” Energy Secretary Alfonso Cusi told reporters.

Power generators have different opinions on the supply situation across all grids in the near term period.

Some fear an oversupply if all the power projects being announced will be built as scheduled, while others believe new plants will merely replace the capacity of the aging stations and not address the demand growth.

Cusi conceded that demand would continue to increase across all grids as the economy expands.

“Based on experience, we have never experienced oversupply,” Cusi said.

He said the government was coordinating with various agencies to ensure the timely construction and completion of power plants to avoid any shortage.

“Today, everything has to be all coordinated, including PSA (power supply agreements… What do you want, oversupply or short supply?” the energy chief asked.

He added the department was also pushing the audit of power plant efficiency levels, including coal.

“We’re just trying to determine what’s their efficiency. We want to motivate them to be more efficient. Also their compliance to standards, so the plants run efficiently and the required supply is available,” Cusi said.

He said the department wanted to put in place the Wholesale Electricity Spot Market in Mindanao by June next year.

AC Energy Holdings Inc. president John Eric Francia earlier cited the need to implement Mindanao’s electricity spot market due to a possible oversupply.

“This is the right time for Mindanao to have a spot market. It’s the first time in decades for Mindanao to have oversupply,” Francia said.

He urged electric cooperatives in the region to embrace the planned WESM in Mindanao.

“There are talks (for WESM Mindanao) but there are also resistance… not all coops are on board at this time. We have to look forward to that given the over capacity situation is likely to stay,” the official said.

He said electric cooperatives in Mindanao should embrace spot market as it would give them the chance to buy cheaper power.

“We are also hopeful that the subsea cable will happen sooner than later,” he said. The underwater cable is seen to link Mindanao to the Visayas, enabling the former to export power to the grid.