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WHO’S AT FAULT FOR THE LUZON GRID’S LACK OF ELECTRICITY RESERVES, EXTENDED PLANT OUTAGE?
The power ‘blame game’
THE Pagbilao Power Station, a 1,155MW coal-fired power plant in Pagbilao, Quezon. ANTONIO OQUIAS | DREAMSTIME.COM
T
By Lenie Lectura
HE Department of Energy (DOE) has flagged power generation companies for their prolonged power plant outages, and the system grid operator for not securing enough firmcontracted ancillary reserves (AS).
In fact, the agency said it would refer this matter to the Energy Regulatory Commission (ERC), the Philippine Competition Commission (PCC) and the Department of Justice (DOJ) for enforcement assistance and case build-up. “We have laid out the policies already. If these policies were not issued, it could have been more chaotic. We are simply asking them to comply,” said DOE Undersecretary Felix William Fuentebella in an interview.
Rules of the game
THERE is an existing directive from the DOE that power producers are not allowed to conduct maintenance shutdown during summer months and realign instead the planned outage schedule toward the second half of the
year. This is meant to maintain sufficient supply in the grid during summer months when demand is at its peak. Likewise, the ERC has issued stringent rules on planned electricity outages to promote accountability among power plant operators and the transmission grid operator. The rules limit the allowed number of days that power plants should undergo shutdown, both planned and unplanned. Older coal plants, for instance, are only allowed to have 27.9 days of planned outages and 16.8 days of unplanned outages, while circulating fluidized bed (CFB) coal plants have 15.4 days of planned and 16.9 days of unplanned shutdown. Also, a power plant that runs on gas should not be out of service for more than 29.2 days, includ-
PESO EXCHANGE RATES n US 48.3900
ing 6.5 days of planned outage and 22.7 days of unplanned outage. Based on data provided by the Joint Congressional Energy Commission (JCEC), a total of 12 power firms did not comply with the ERC’s Reliability Index. Their power plants—mostly thermal and gas—exceeded the maximum allowable planned and unplanned outage days that are spelled out in the ERC rules. That scale of outages shaved at least 1,900MW of capacity from the grid.
Nothing new–Aboitiz Power Corp.
WHEN sought for comment, Aboitiz Power Corp. said the issue on alleged economic sabotage is not new. Still, it maintained that none of its plants were shut down on purpose. “Our baseload plants are contracted almost at capacity and if they are on outage, we have to continue supplying our customers by buying from the spot market or through replacement power contracts, if they are available. Most probably, when a baseload plant goes down, prices in the spot market spike, thus the cost of power that we supply our customers bought from WESM [Wholesale Electricity Spot Market] will be usually higher than our selling
prices,” the firm said. “Thus, it makes no sense to intentionally put a plant in outage to game WESM since we have to buy at high prices to fulfill our contracted commitments. We only make money when our plants are operating,” Emmanuel Rubio, Aboitiz Power president, said in a text message. One of its power plants has been on prolonged shutdown since February. It could be back online by August. Senate Energy Committee chairman Sherwin Gatchalian had asked the ERC at the recent JCEC hearing why it has not sanctioned a single power firm. He warned ERC chairman Agnes VST Devanadera to make sure that all guidelines, rules and policies must be enforced “or else, accountability fails.” The ERC chief assured him that a final report would be out soon. “The final report is not ready yet. We just started in January 2021 and just four months to it. But we have some data. About 15 or 16 gencos [generating companies] already, but we have to get the analysis. When we are done with this, the most logical thing to do is to implement and impose penalties when needed,” Devanadera told the committee.
The senator also called on the ERC to “flex its muscles” being the power industry’s regulator. Gatchalian was referring to the DOE policy on ancillary services, or AS, which requires the National Grid Corporation of the Philippines (NGCP) to procure AS through firm contracts.
Crucial AS
THE AS are necessary to support the transmission capacity, maintaining reliable operation of the transmission system and electricity supply in the grid. Energy Secretary Alfonso Cusi pointed out that ancillary services Continued on A2
n JAPAN 0.4443 n UK 67.4702 n HK 6.2333 n CHINA 7.4768 n SINGAPORE 36.4905 n AUSTRALIA 37.5894 n EU 58.6777 n SAUDI ARABIA 12.9047
Source: BSP (April 30, 2021)