As Luzon grid sees supply shortage, Gencos ordered to explain outages

National Financial Solution > Business Report > As Luzon grid sees supply shortage, Gencos ordered to explain outages


Rotating outages continued in Metro Manila, as the grid operator raised a red alert on the Luzon grid. — PHILIPPINE STAR/ MICHAEL VARCAS

By Angelica Y. Yang, Reporter

THE ENERGY Regulatory Commission (ERC) on Wednesday said it will order generation companies (gencos) to explain plant shutdowns, as the grid operator raised a red alert on the Luzon grid for the third time this week.

“We will be determining who are on outage again and require them to explain. [V]irtual inspections, if necessary, will be conducted,” ERC Commissioner-in-Charge Floresinda G. Baldo-Digal told BusinessWorld on Viber on Wednesday.

The commission ordered erring gencos to explain why they have breached the limit of allowable unplanned outages this year.

ERC Chairperson Agnes VST Devanadera in a statement said there were some gencos that have exceeded the maximum limit as of April 2021.

Data obtained by BusinessWorld showed that the ERC issued notices of noncompliances to 17 gencos operating a total of 35 plants from May 12 to 18. Of the number, the commission has received replies from 13 gencos to date.

Rotating outages continued in parts of Luzon, including Metro Manila, on Wednesday, as the National Grid Corp. of the Philippines (NGCP) once again raised a red alert on Wednesday.

The NGCP initially reported a deficit of 716 megawatts (MW), as the peak demand hit 11,976 MW and available capacity stood at 11,260 MW.

The Department of Energy (DoE) in a separate statement said an additional 388 MW of oil-based, hydro, biomass and solar plants were declared as “derated” or reduced on Wednesday.

Latest data showed that the forced outages reached 1,314 MW on Wednesday, due to the unavailability of unit 2 of the Pagbilao coal plant; units 1 and 2 of the GNPower Mariveles Energy Center’s coal plant, and unit 2 of the Calaca coal plant.

The total planned outages, on the other hand, hit 435 MW, as three units of the San Roque Power Corp.’s hydro power plant remained offline.

The DoE said that the red and yellow alerts issued during peak hours on Wednesday were lifted due to low system demand and the synchronization of unit 2 of the 647-MW Sual coal plant.

“The available capacity has improved with a net increase of up to 265 MW with the early entry of Sual Unit 2 despite the untimely forced outage of Pagbilao Unit 2,” it said.

JUNE RATES UNAFFECTED
Meanwhile, an official from Manila Electric Co. (Meralco) said that this month’s power rates will not be affected by the series of red alerts raised on the grid this week.

“The current power situation will be reflected in July rates,” Meralco Vice-President and Head of Utility Economics Lawrence S. Fernandez told BusinessWorld on Viber. He did not, however, give an estimate of the additional amount which customers had to pay when the grid went on red alerts since doing so would be “highly speculative.”

Mr. Fernandez noted that even before the spate of red alerts, the firm had experienced “high spot market prices since May due to reduced power supply caused by plant outages.” Last month, the average power price on the wholesale electricity spot market (WESM) more than doubled to reach P7.72 per kilowatt-hour (kWh), from P3.85/kWh in April.

“When rising demand coincides with reduced supply — as in the case of the power plant outages — there is pressure for spot market prices to go up,” Mr. Fernandez explained.

Independent Electricity Market Operator of the Philippines (IEMOP) spokesperson Andrea May T. Caguete separately told BusinessWorld in a text message that the estimated average WESM price from May 26 to June 1 is at P8.98 kWh, which she described as “substantially higher” than the rate recorded last month.

The DoE said that the secondary price cap is now in effect. The cap allows the market operator to limit prices at P6.246/kWh “to protect consumers from possible spikes.”



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