The Department of Energy (DOE) should crafting of policies that will address the power situation in the country as existing power plants are no longer as efficient due to their age.
This was the call of the Energy Regulatory Commission (ERC) in the wake of last week’s red and yellow alerts in Luzon Grid that led to rotating brownouts.
“We have noticed that most plants in Luzon are 16 years and older and we think for policy consideration, we have to look into this… that as these power plants get older even if we give them planned maintenance period… because they are old they cannot be that efficient anymore,” said Agnes Devanadera, ERC chair.
At a Congressional hearing on Friday, Devanadera said 29.35 percent or 4,238,135 kilowatts (kw) of total dependable capacity in the Luzon Grid are from power plants that are aged 16 to 20 years while 24.02 percent or 3,390,690 kw are from facilities that are 21 to 25 years old.
She said 17.69 percent or 2,231,260 kw are from plants that are running for five years or less as 14.06 percent or 2,136,181 kw are from those that have been operational for over 30 years.
About 9.27 percent or 1,419,540 kw are from those six to 10 years while 3.20 percent or 435,600 are from 26 to 30 years old and the smallest share at 2.43 percent or 368,425 kw are from 11 to 15 years old power plants.
In 2016, the DOE signed an agreement with the Institute of Integrated Electrical Engineers of the Philippines to organize several task forces which will audit the whole power industry to determine technical or contractual issues and come up with solutions that will be established and institutionalized.
Results of the audit have yet to be released.
Devanadera also said the National Grid Corporation of the Philippines (NGCP) could consider contracting its ancillary reserve requirements on a firm level so it could fully and exclusively obtain power reserves.
At present, NGCP can only buy its reserves from the same pool of power generators that also supply electricity to distribution utilities (DUs).
The Philippine Independent Power Producers Association Inc. (PIPPA) expressed support to the DOE’s calls for DUs to bid out their power requirements to attract new investments and increase available power capacity.
The group also supported the calls for the NGCP to contract ancillary reserves in a firm basis but pointed out the need to create a separate market for reserves as well as for derivatives so the company would not compete for the supply needed by DUs.
Anne Estorco-Montelibano, PIPPA executive director, added that barriers for the entry of new power plants.
Montelibano saidan increase of price caps in the wholesale electricity spot market would also encourage investors to build peaking power plants that are rarely dispatched but crucial when demand suddenly kicks.
