The Department of Energy (DOE) approved the implementation of a gas swapping arrangement as a solution to the projected shortage of electricity supply from March to July this year.
An official from the agency who spoke on condition of anonymity said under the deal, two units of First Gen Corp.’s Santa Rita natural gas-fired power plant will temporarily run using liquid fuel in order for San Miguel Corp.’s (SMC) Ilijan power plant to be able to run using natural gas supply that will not be used by First Gen.
The DOE official said the agreement was made last December 27 in a meeting attended by representatives of First Gen, Prime Energy, Manila Electric Co. (Meralco) and SMC’s South Premier Power Corp. (SPPC).
Based on the minutes of the meeting provided by the official and which was signed by representatives of the companies as well as undersecretaries of the DOE, involved parties would implement a gas swapping deal that would send at least 80 standard cubic foot of First Gen’s banked gas allocation from Malampaya for SPPC to operate the Ilijan power plant.
With the deal, Ilijan will be able to generate a minimum of 400 megawatts (MW) to a maximum of 1,000 MW to help fill the gap from March to July.
The source said the arrangement was deemed more prudent as it will keep costs of power to a maximum of P4 per kilowatt hour instead of the more costly option of letting the Ilijan power plant run on diesel. This would in turn result to higher prices for consumers.
The minutes of the meeting also indicated the gas swapping agreement will be submitted to Prime Energy, operator of the Malampaya gas field while the DOE will still ensure that Meralco sources energy at the least possible costs.
The DOE also committed to help those involved in the gas swap arrangement secure permits at the shortest time possible.
Earlier, the DOE warned the Luzon Grid may experience at least 12 weeks of yellow alerts this year as i the level of power reserve in the grid is low, during these periods
The DOE said approved grid operating management plan forecast factors in up to 600 MW of capacity under forced outages.
The agency said yellow alerts are seen on March 12 to 18; March 26 to April 1; April 23 to 29, the entire month of May; June 1 to 10; August 27 to September 2; October 15 to 21 and; November 19 to 25.
However, DOE said if 420 MW of diesel-fired power plants will be operated as needed, yellow alert may only be hoisted for one week or from April 30 to May 6.
The DOE is hesitant to run diesel power plants whose cost to operate is high. – Jed Macapagal
