“This should be a priority of the next administration.”
Consumer advocacy group CitizenWatch Philippines, where I serve as a convenor, has released a statement calling on government power regulators and industry players to act with urgency to prevent power outages during the country’s national elections in May which is in the middle of brownout prone summer months.
We are still in the cool and somewhat rainy La Niña months, but the Luzon grid had already been placed on Yellow Alert on January 10 and 11, 2022. Posted information from the National Grid Corporation of the Philippines (NGCP) reported that on January 10, Yellow alert was raised because of Forced Outage of the following power plants: GNPower Dinginin Unit 1 (668 MW), GNPower Unit 1 (316 MW), Calaca Unit 2 (300 MW), Avion 1 (47 MW). Adding to that were these power plants operating at derated capacities: Ilijan at 695 MW (derated by 505 MW from 1200 MW), Masinloc Unit 2 at 305 MW (derated by 39 MW from 344 MW), Magat at 160 MW (derated by 180 MW from 340 MW), and San Gabriel at 210 MW (derated by 210 MW from 420 MW). Total unplanned unavailable capacity for that day was 2,265 MW. This situation continued until the next day.
In 2021, over 4,000 MW were affected by the outages, both planned and unplanned. Majority of the disruptions were due to unplanned outages and derated plants. When these outages occur, all consumers are affected. Everything becomes more difficult and more expensive. Just checking our electricity bills will show us that our consumption increases during hot weather months when we have to keep our electric fans and air-conditioning units on for longer hours. Working and schooling from home has also increased our consumption because we consume power in our domiciles instead of being out all day at work or school. While we are trying to get through as best as we can in this pandemic crisis, another power shortage will spark high spot market prices that power distribution utilities (DUs) will be forced to purchase to meet consumer demand and avert brownouts.
Another contributing factor is the depleting natural gas from the Malampaya gas field which is having its own set of issues. This forces many major power plants supplying the Luzon grid that are dependent on Malampaya’s supply to operate below its rated capacity and aggravating the already tight power supply.
In September 2021 when Malampaya suddenly shut down, base load power plants affected were the 414-Megawatt (MW) San Gabriel which temporarily powered off while the 1,000 MW Sta. Rita and the 500 MW San Lorenzo plant had to shift to more expensive liquid fuel. These are some of the biggest baseload power plants for the Luzon Grid. Supply dropped by approximately 1,900 MW due to the three-day disruption which then caused an increase in the generation charge in the next billing cycle.
As we are now coming out of the Omicron surge and alert levels are easing, less mobility restrictions will spur more business activities in all sectors and of course increase power consumption. God forbid, should another surge hit the country in summer and safety protocols force another economic slowdown, the DOE’s Interruptible Load Program (ILP), which has been serving as an effective stop-gap measure to avoid or lessen rolling brownouts, may become inadequate if industries are not operating at full capacity. ILP reduces consumption from the grid by allowing participating electivity customers – usually big enterprises with back-up power systems – to operate their generating sets and collectively reduce electricity drawn from the grid to at least minimize power interruptions during red alerts.
The DOE’s decision to allow Meralco to conduct a Competitive Selection Process for the supply of 170 MW of peaking power is a good move in the right direction to at least build up power reserves for the looming summer shortage. The contract was awarded to San Miguel Corp.’s South Premiere Power Corp for submitting the lowest bid of P6.8198 per kWh, below the total delivered headline reserve price of P7.2989 per kWh.
To compensate for the reduction of Malampaya’s natural gas supply to major power plants, Meralco has a pending application for another CSP to add another 180 MW for baseload capacity. Considering the very limited options and expecting temperatures to start rising in a month or so, the DOE should immediately approve Meralco’s CSP as we cannot expect any improvement on Malampaya’s chronic situation.
To move forward towards recovery, the government must do more to speed up the building of new power plants with the best technologies that can deliver reliable and more affordable electricity. The stability of the country’s power supply influences the pace of economic growth and should be a top priority of the next administration.