Power supply tight till 2018

by Lenie Lectura, 23 February 2015
from BusinessMirror

Top officials of the Manila Electric Co. (Meralco) disclosed on Monday that Luzon will continue to have a power-supply problem until 2018, and expressed hope that the situation will not deteriorate further given the state of the region’s power infrastructure.

“This year would be the tightest year. There is some degree of continued tightness even up to next year, in 2016 and in 2018,” Meralco President Oscar S. Reyes said.

Luzon is bracing for a tight power supply this year, because of the scheduled 30-day Malampaya natural-gas facility shutdown starting March 15. Apart from this, there are several power plants that are scheduled to undergo maintenance shutdown.

“The country’s economic growth has also put pressure on the aging and inadequate power-generation infrastructure in the Luzon grid, resulting in increasing forced outages and longer scheduled shutdowns of power plants,” Reyes said.

Meralco recorded 83 forced power-plant outages and 52 scheduled power-plant shutdowns last year. Most of the power plants are very old, which is the reason they conk out. “What has not been evident before, which now has come to light, is really the effect of aging power plants…. We are in a tight situation right now. Recently, there have been renewed warnings of potential brownouts,” Reyes added.

Moreover, the new generating capacity has not matched the growth in peak demand in 2014 of 3.3 percent in the Meralco franchise area to 6,121 MW, and 5 percent in the Luzon grid to 8,717 MW, adding pressure on power supply and reserves in 2015.

Meralco’s own way to address an increasing demand in its franchise area is to enter into additional Interim Power Supply Agreements with power producers, even as it looks to Meralco PowerGen Corp. and other generators to construct and commission new plant capacities at the earliest possible time.

In July last year, Energy Secretary Carlos Jericho L. Petilla announced the probability of a looming power shortage of at least 700 MW that will affect Luzon during summer this year. The scarce energy reserve has pushed the government to come up with alternative solutions to avert the crisis, including the Interruptible Load Program (ILP) for large commercial electricity consumers.

As of latest count, Meralco’s interruptible load capacity stood at 617 MW, is equivalent to the power generating capacity of the Sual power plant, the country’s biggest power plant.

Meralco Chairman Manuel Pangilinan stressed that the ILP cannot guarantee a brownout-free summer given that the implementation of the program is voluntary.

“As of latest count, Meralco’s ILP has reached 617 MW. The important thing here  is for [ILP participants] to  respond when called. If they do, rolling brownouts could hopefully be minimized. We don’t have compulsory powers. We don’t” want to give them the impression that there will be no brownouts.”

As early as January 2013, Meralco officials had warned of tight power supply in the Luzon grid by the summer of 2015. Shortly after that warning, the Department of Energy (DOE) disputed this by saying there is enough supply of about 800 MW. However, the DOE said later that it anticipates a power-supply problem that will occur in the summer months of 2015.

Last week the DOE said over 1,000 MW of additional power-generating capacity will be available in the Luzon grid during summer this year.

Recently, the Philippine Independent Power Producers Association President (Pippa) said from April 5 to 15 will be the  “criticalperiod” because high demand will coincide with the one-month maintenance shutdown of the Malampaya gas field. An increase of P1 per kilowatt-hour in generation charge is likely to happen, Pippa President Luis Miguel Aboitiz said.

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