THE Department of Energy (DOE) assured over the weekend that summer months of 2024 could be “97-percent” brownout-free because the recurring issue on the lack of power reserves will finally be addressed before the year ends.
Barring natural disasters and steady power demand, “I would say we are at 97 percent because we can’t control when the typhoons will enter the country. We used to know what month typhoons will occur but now it seems that we have typhoons all year round,” DOE Undersecretary Rowena Cristina L. Guevara replied when asked by Senator Ana Theresia “Risa” N. Hontiveros if the agency can assure a 100-percent brownout-free summer next year.
Strong typhoons in the country bring high winds that damage power generation facilities and transmission lines that eventually result in power outages.
During last Friday’s budget hearing of the Senate sub-finance committee, the DOE also took into account the new capacities coming in and a stable demand to back up its brownout-free summer pronouncement next year.
“Our problem last summer was not that bad compared to what we’re projecting before. Summer was really a precarious time for us when we didn’t have enough supply.
Fortunately, there are a lot of renewable energy generators that are coming in until the end of this year and starting next year. If all those projects are able to fulfill all the requirements for permits and they are able to construct, we should not have that problem next year as long as there’s no sudden increase in the demand. If demand stays based on our projection of 3-percent growth then it should not be a problem,” Guevara said.
More importantly, the DOE official assured that there will be sufficient power reserves because the planned auction for it will finally commence by year end.
Senator Sherwin T. Gatchalian , who presided over the hearing, asked if the National Grid Corporation of the Philippines (NGCP) is already compliant with the required ancillary or support services—the lack of which has been blamed for the power outage incidents in the past.
In June, transmission lines tripped and isolated some power plants resulting in automatic load dropping or power outage incidents. The NGCP was blamed again for this because of delayed transmission projects and lack of ancillary services.
Based on his records, Gatchalian had said that only six out of 16 transmission projects considered to be Energy Projects of National Significance (EPNS) were completed as of March this year, with an “average period of delay of about three years.”
This represented about 37.5-percent completion rate. The 10 EPNS transmission projects currently under construction, meanwhile, also have an “average period of delay of almost 5 years.”
Gatchalian also revealed that out of 168 projects under the Transmission Development Plan, excluding 56 projects that are in the pre-construction stage, only 30 projects have been completed, while 138 projects are delayed.
The NGCP, which holds the sole and exclusive concession and franchise for operating the Philippines’ transmission network, said the delay in the implementation of these projects “are not intentional” as it cited, among others, right-of-way (ROW) issues as the biggest challenge encountered.
“Again, we always go back to this. Part of the reason why we don’t have grid stability is we don’t have ancillary services. The ERC [Energy Regulatory Commission] released many resolutions on this matter and I think the ERC penalized NGCP for this. If NGCP is still not complying then we are back to where we were,” Gatchalian said during the hearing.
Guevara, however, assured that the NGCP now “has no choice” but to comply with the DOE policy on the creation of the Reserve Market (RM)—the venue for trading of ancillary services or power reserves meant to support the power transmission system.
The RM is undergoing trial operations for three months in preparation for the full commercial operations on December 26, 2023. “By end of the year, the reserve mkt will be fully operational and therefore there’s no reason for NGCP not to be able to fulfil all the ancillary requirements,” said Guevara.
During the hearing, ERC Chairman Monalisa C. Dimalanta commented that there will be no excuse this time for NGCP not to procure ample power reserves.
“If you recall the reason for NGCP not having required the level of AS was that there was not enough offers. But with the Reserve Market already operational, all offers are centralized, that excuse is not available anymore. So, if they still not able to fulfil obligations then clearly they are in violation of obligation already,” Dimalanta said.
Ancillary services are stand-by power in the event that baseload power plants bogged down. The system operator (SO), which is the NGCP, is required to maintain a certain level of AS to support the transmission of power from generators to consumers.
The NGCP procures AS via competitive selection process (CSP) but the capacities derived from the competitive auction are still not enough. Hence, the need for the RM auction.
Based on the approved 2023-2032 “Ancillary Services Agreement Procurement” plan, the required Regulating Reserve (RR), Contingency Reserve (CR), and Dispatchable Reserve (DR) for 2023 are 729 megawatts (MW), 959 MW, and 959 MW, respectively. On the other hand, the awarded AS per the recently concluded Competitive Selection Process (CSP) for the said AS requirements are 396 MW for RR, 985 MW for CR, and 866 MW for DR, respectively.
NGCP said ancillary services are necessary for it to manage power fluctuations to ensure the quality and reliability of power flowing through its system. If not managed properly, it said that fluctuations can cause damage to sensitive equipment, or even automatic load dropping, if the fluctuations are severe enough to pose a danger to the transmission system as a whole.