Luzon Grid may experience another power supply shortage next year unless at least 2,000 megawatts (MW) new power capacity will be built, according to the Institute for Climate and Sustainable Cities (ICSC) .
Alberto Dalusung III, the group’s energy transition advisor, said solar power is currently the fastest technology that can be deployed to meet the required new capacity in time, especially that almost 9,000 MW of power from the said resource in Luzon have been granted with service contracts.
“…Red alerts and yellow alerts are not rare, they are common. It’s perennial and we have it every second quarter of the year. Given the current state of our supply mix, it cannot have new capacity that soon… A lot of calculations have to be done but… solar (h)as a potential way to address such future problems,” Dalusung said in a virtual briefing yesterday.
Dalusung said 1,747 MW became unavailable in the Luzon Grid when the rotational power interruptions were experienced last week due to forced and extended outages of coal-fired power plants apart from capacity deratings.
The ICSC added power demand for next year may be higher and the deficit could get “worse” as quarantine restrictions may be further relaxed.
Supply could be augmented if solar power plants are built in six months to a year.
“Solar is not available 100 percent of the time but this deficit is during the peak hours from 10 a. m.to 2 p.m. (when) solar plants produce higher generation,” said Pedro Maniego Jr., ICSC senior policy advisor.
Maniego said solar power proponents are prepared to build their projects but have a hard time securing funding.
“Banks will not give you loans unless you have a power supply agreement (PSA) and that is difficult to obtain,” Maniego added,
Sara Jane Ahmed, founder of the Financial Futures Center, said banks should consider funding merchant power plants or those without PSAs and sell power only to the wholesale electricity spot market (WESM) as they have a proven market case.
“We have WESM where you can sell power to and we have power supply issues and if you look at how long it takes to approve a PSA, it’s likely that our installations will continue to be delayed in the foreseeable future unless something drastically changes with the regulators,” Ahmed said.
In a separate statement, the Energy Regulatory Commission (ERC) said that has been looking into the generation companies’ unplanned outages and the recent spikes in WESM prices.
ERC has sent notices of non-compliance to generation companies to explain the incurred cumulative unplanned outages beyond the maximum allowable unplanned outage days for 2021.
The regulatory body added that some generation companies are not compliant with the reporting requirements as out of the 2,083 incidents of unplanned outages from January to April 2021, only 1,288 incidents were reported. For the 236 incidents on the planned outages, only 220 were reported.
