The feared power shortage: Why it did not happen (Part 2)

by Lenie Lectura, 13 July 2015
form BusinessMirror

In Photo: An elementary student from Tinajeros, Malabon, is forced to work on her assignment by candlelight as electricity in their house was cut off due to nonpayment of bills.

It has been a year now since the looming power crisis was sounded off and yet not a single brownout due to supply shortage occurred in Luzon.

As it turned out, an old pump-storage power facility in Laguna proved to still be useful.

While the debate on emergency powers went on, the Senate—Sen. Sergio Osmeña III in particular—wanted the 727-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) to run at its full capacity. Due to line constraints and other issues, the CBK is only able to deliver around 300 MW.

“I personally went there to ask why CBK is not running at its full capacity. The answer I got was because, aside from the transmission line, the resorts nearby would complain if water level would rise. So we talked to the resort owners and owners of small houses there, and told them they will be compensated if they will relocate. CBK was created as a pump storage and not as a resort lake,” Osmeña said.

Likewise, the line constraint was addressed. “The NGCP [National Grid Corp. of the Philippines] has energized the Lumban line. So CBK will now give us 720 MW, not only for three months in summer but forever,” Osmeña said.

CBK to the rescue

The Senate pushed for the declaration of the CBK plants as “must-run units” during peak hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.

It urged the Department of Energy (DOE) to declare all CBK pump-storage power plant units as “must-load units” from 8 p.m. to 8 a.m. from Monday to Saturday, and even on Sunday, if and when requested by the Power Sector Assets and Liabilities Management Corp. (PSALM); and as must-run units during peak period hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.

PSALM is the agency mandated by Republic Act 9136, or the Electric Power Industry Reform Act (Epira) of 2001, to handle the sale of the remaining state power assets and financial obligations of the National Power Corp. (Napocor).

Napocor President Gladys Cruz-Sta. Maria said her office also played an important role in running the CBK at its full capacity.

In an interview, she said there was a study conducted by Napocor to optimize CBK’s operation. “I think the study initiated by Napocor was instrumental to averting the projected power-supply deficiency in Luzon,” she commented.

“Napocor, in coordination with the DOE and the office of Senator Osmeña, implemented increasing the water elevation of Caliraya Lake to 288.5 meters above sea level [masl]. Historically, the maximum elevation was only at 287.1 masl,” Sta. Maria said.

She further said the increased elevation prepared Kalayaan for dispatch at 720 MW for six hours a day, Mondays to Fridays. “This precluded declaration of yellow or red alerts, including brownouts, which could have otherwise occurred with Kalayaan on status quo. This effectively provided additional capacity of 400 MW on top of the usual 320 MW.”

Moreover, the Napocor official said her office was on top of the relocation of informal settlers that could have been affected by the water elevation.

CBK, however, is up for privatization next year. Before former Energy Secretary Carlos Jericho L. Petilla stepped down as energy chief, he asked PSALM to hold off the auction. Petilla strongly believes that the CBK should remain as a regulating power reserve.

“I feel that it should not be privatized because it is the only asset left in this country that serves as regulating reserve. It’s the best defense this country has to regulate the grid,” Petilla said.

In earlier presentations PSALM intends to privatize the CBK hydropower facility in the second half of 2016. Likewise, the state firm has set the indicative turnover of the administrator of the CBK contracts by the first semester of 2017.

If Petilla, who also served as vice chairman of the PSALM board, would have his way, he said, “I would defer” the auction. He said it was because of CBK that Luzon was able to avert a power outage. “We did not have brownouts because of that. CBK remains the only regulating asset in this country [and] that its main use is for security,” Petilla added.

When sought for comment, PSALM Officer in Charge Lourdes Alzona said Kalayaan of the CBK plant complex acts both as regulating and contingency reserve. There is no board approval yet if the auction will proceed.

“As to the privatization of the CBK, we defer to our board. All privatization terms and conditions are subject to board approval. Target privatization for CBK is still 2016. It is not yet in the agenda of board meetings in the coming months,” she said in an interview.

Cooler summer

Another reason Luzon was spared from brownouts was because of manageable demand for electricity, mainly on account of cooler temperature last summer.

“This is the only summer I can remember that it was still raining in March and there’s a typhoon in April. Basically, it is unusual. This is good because our hydropower plants are not getting dried up. They are supposed to dry up during summer.  The temperature is also not that high, so demand is not yet at its very peak,” the resigned energy chief said.

Based on the DOE’s weekly forecast, Petilla said there is “plenty of reserve now.” “We are still going to be okay at this point. The hydropower plants are performing well. We have a good weather. All these things are coming into play,” he added.

DOE Officer in Charge Zenaida Monsada said current power supply is able to meet the demand. “We hope that there will be no unscheduled shutdown of power plants because that will have an impact on our reserves. We have enough supply and reserves, provided that no power plants conk out all at the same time,” Monsada said when sought for comment.

The top officials of Napocor and PSALM both agreed that the DOE played a very important role in averting a power crisis.

“Apart from the weather condition that led to a peak demand lower than the projection, several measures were implemented by all sectors in the industry. The DOE played a vital role in coordinating the government’s initiatives to stabilize power supply, as well as the support of the legislators,” Alzona said.

Sta. Maria, for her part, said the demand side management, vigorously campaigned by the DOE, helped reduce the actual peak demand during the summer months, as well as reduce forced outages of
major facilities. “For this reason, it was not necessary to tap the Interruptible Load Program prepared by the distribution utilities and electric cooperatives.”

Effective campaign

The DOE also launched a campaign to encourage the public to conserve energy.

The “Energy Sense, Saves Cents” campaign is aimed at promoting energy conservation in residential and commercial areas. The DOE launched a series of TV, radio and print commercials highlighting the campaign.

In one of the commercials, Petilla promotes that putting the thermostat of cooling systems to 25 degrees Celsius would not only save on costs, but also eases demand for electricity.

“Everybody cooperated. We were able to make people conscious of their energy consumption. People are cooperating by saving power. CBK, of course, was very helpful. It also helped that there was an early warning of what may happen in summer, which, fortunately, did not happen. But most important, the consumers cooperated as demand was manageable,” Petilla said.

Energy Utilization Management Bureau Director Patrick Aquino said each household can really save on energy. “We are highlighting things that each household can do to be more efficient in their energy use… apart from making our household appliances more efficient, is our quest for savings,” he said.

To date the DOE continues to spread awareness on the importance of energy efficiency through common examples that citizens can apply quickly in their homes and even share to others, Aquino said.

Additional tips and more information are available at the web site—the DOE web site for energy efficiency and conservation—the DOE also said.

To be continued

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