THE Department of Energy (DOE) has once again allayed fears of yet another looming electricity shortage leading to brownouts this coming dry season, assuring there is stable power supply.
There is no need to worry, DOE assured the public, because the agency has come up with “holistic solutions and contingency measures” to keep power outages at bay.
Industry stakeholders, however, are singing a different tune.
Tight prices
The operator of the Wholesale Electricity Spot Market (WESM) declared on January 30 that the Luzon grid is facing tight power supply, and thus anticipates higher spot market prices.
“With the expected increase in demand, tight supply conditions and price spikes are likely to happen, particularly during the summer period. This underscores the need for new generation capacities to meet increasing demand and to help prevent recurrence of high market clearing prices,” said Robinson Descanzo, chief operating officer of Independent Electricity Market Operator of the Philippines Inc. (Iemop).
Luzon, he said, would need an additional 500 megawatts (MW). Using the DOE’s 2016-2040 Power Development Plan Demand Growth Rate, Iemop said power demand in Luzon is forecast to increase 4.9 percent.
“But we don’t have additional power plants coming in before summer. They will come in only after summer,” Descanzo said.
Supply deficiency
A week later, the Energy Regulatory Commission (ERC) said there is a power supply deficiency of 1,800 to 1,900 MW. The numbers, according to ERC chairman and chief executive officer Agnes VST Devanadera, came from the DOE itself.
While the DOE did not dispute the figures cited by the ERC, DOE assistant secretary Redentor Delola explained that the numbers refer to the least loss of load expectation, or LOLE, of one day, or a “probabilistic measure” of the number of days that the power generation will be insufficient to meet the demand “with adverse conditions present.”
“We need that much if we aim for the least LOLE of one day,” commented Delola.
The ERC chief stressed the importance of new power generation capacity, which the Luzon grid lacks, and well-maintained power plants.
“We cannot build plants. The only thing left for us is, how we dealt with the Supreme Court decision on the 153 PSAs [power supply agreements] that were told to undergo CSP [Competitive Selection Process]—as matter of policy, we told them, don’t stop your supply while you’re doing your CSP,” Devanadera said. “Because if supply stops, as an effect of the Supreme Court decision, that’s 1,000 plus megawatts again on top of the real shortage.”
Red alerts
Two weeks later, the National Electrification Administration (NEA) warned of rotational brownouts that could last for an hour, and thus called on all electric cooperatives (ECs) to prepare their respective contingency plans like the demand-side management programs and maximizing embedded power plants to reduce, if not eliminate, rotating brownouts during peak hours.
NEA administrator Edgardo Masongsong’s warning was based on DOE estimates that red alerts may be issued from April 18 to 21 and May 20 to 22.
A red alert is issued when the power supply in power grids is insufficient and may result in rotational brownouts, or manual load dropping in areas covered by particular grids.
System operator, National Grid Corporation of the Philippines (NGCP), issued the same warning and called for the intervention of government agencies to address the power shortage looming over the Luzon grid.
“With the increase in power demand, lack of new base-load plants, power plants decommissioning and longer unplanned maintenance shutdowns of aging plants, as well as the unpredictable weather, NGCP is urging the authorities to focus efforts on stemming what seems to be an impending power shortage in Luzon, especially during the summer season,” it said. “We cannot provide, or implement, solutions to a generation deficiency-induced shortage.”
Between April and June this year, NGCP said that electricity supply is thin, even with an expected incoming 700-MW capacity from new power plants.
The Luzon grid needs around 4 percent of the peak demand, or around 491 MW, in regulating power to stabilize the grid. It also needs to maintain power equivalent to the largest plant online, which is 647 MW, as contingency power to support the grid in case of an emergency power plant shutdown.
Should the net operating margin fall below these numbers, NGCP will issue a yellow alert. Further, if the power supply falls below the system peak demand (SPD), a red alert will be issued.
‘Hard pressed’
As such, the NGCP stressed the need for a comprehensive, far-reaching power development plan that considers generation technology, facility location, and dispatch hierarchy.
“In a situation where supply is thin, even NGCP is hard-pressed to find ancillary services to support the grid. NGCP is strictly prohibited by law from building its own power plants, and it is entirely dependent on the generating capacities that are installed in the Philippine grid,” it explained.
Just recently, the DOE held a news conference and released official power demand and supply figures.
It forecasts a total system peak demand of 12,285 MW for Luzon to occur in May 2020, an increase of 8.3 percent from the actual 2019 peak demand of 11,344 MW, which occurred on June 21, 2019.
“While there is enough power capacity at present, depending on the volume of forced outages, yellow and/or red alerts may be raised,” said the DOE.
Harmonized solutions
The DOE, however, is unfazed. Secretary Alfonso Cusi said his office has been actively working with the entire energy family for all the necessary preparations, as well as the development of harmonized solutions to ensure adequate power supply all year round.
The interruptible load program (ILP) is one of the measures identified by the DOE to help ease demand on the grid.
The Manila Electric Company (Meralco), which distributes electricity to 6.7 million customers, is ready to activate its ILP, in which it will ask its partner establishments to turn their power generators on whenever the power supply is constricted, instead of drawing power from the grid. Thus, power supply that will not be consumed by participating customers will be available for use by other customers within Meralco’s franchise area.
“In case there are forced outages by the power generators, Meralco has measures in place to ensure continued, reliable service to our customers. It continues to reach out to partner customers to implement the ILP in order to augment the power supply needed in households in Luzon during times of challenged supply,” said Meralco spokesman Joe Zaldarriaga when sought for comment.
Meralco anticipates yearly peak demand growing at around 3.5 percent.
“For the period 2000 to 2019, the compounded annual growth rate of Meralco’s peak demand was around 3.5 percent. We see long-run growth to be similar to last 20 years,” said Meralco utility economics head Lawrence Fernandez.
Aside from ILP, the DOE encourages consumers to actively practice energy efficiency and conservation measures to help curb demand.
The net metering policy, it added, could also help. Under the net metering program, electricity end-users with renewable energy installations can sell electricity they generate in excess of what they can consume directly to their distribution utility.
So, are consumers spared from possible brownouts with all these measures cited by the DOE?
The DOE’s reply: “These are just contingency measures in the event of forced outages, which are outside of the department’s control and cannot accurately forecast.”
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