BUSINESS MIRROR
TUESDAY, 01 MARCH 2011 19:54 PAUL ANTHONY A. ISLA / REPORTER
REPLICATING the power market in Mindanao will likely be easier than what was experienced when the Philippine Electricity Market Corp. (PEMC) opened the Wholesale Electricity Spot Market (WESM) in the Visayas.
This is what AboitizPower Corp. senior vice president for sales, trade and marketing Luis Miguel Aboitiz indicated to reporters when he said he deems that opening the WESM in Mindanao is easier considering that the entire Mindanao grid suffers from rotating brownouts.
“After the successful experience in the Visayas, PEMC is now looking at implementing the WESM in Mindanao. If they do that, I think it will free up a lot of additional power in Mindanao,” he said.
Aboitiz quickly added that there are a lot of factories in Mindanao that have their own diesel plants, as they will have another venue where they could sell their excess capacity.
Aboitiz said the WESM Visayas has eased a lot of the brownouts since it introduced 200 megawatts (MW) of additional power coming from diesel- power plants.
“Power rates during peak hours costs around P8 per kilowatt hour, which is not bad since diesel really costs a lot. The marginal cost for a diesel plant is about P6. I think pricing has been very tame in the Visayas,” he added.
Aboitiz declined to specify how much capacity could be freed up since he has yet to count how many diesel plants are in Mindanao. “But I think it would be at least 100 MW, but that’s assuming all industries participate.”
Aboitiz said the Visayas grid did not experience much brownout as the Mindanao grid did.
“In the Visayas, you had places like Panay experiencing more brownouts than Cebu and less in Leyte. So the ones experiencing brownouts, obviously they don’t care and they don’t want it since it might also bring the price up,” he said.
Energy Secretary Jose Rene Almendras earlier said that the Department of Energy (DOE) was mulling the setting up of a WESM in Mindanao in a bid to address the power situation in the region.
“We’re trying to look for a way to dispatch ancillary power in Mindanao in a fair pricing mechanism. Everything is still way up in the air as to how exactly we’re going to do it,” the energy chief said.
Almendras further explained that what they have in mind is mechanism that would place a fixed price unlike in the WESM where the price is determined by supply and demand.
Almendras added that the only way you can dispatch ancillary service is by putting a market that will allow it.
“Otherwise, they will not be dispatched since they have no contracts as nobody will sign baseload contract with them,” he said.
In Mindanao where there are diesel plants or a lot of existing diesel plants are rehabilitated, Almendras said, these are the most ideal facilities for ancillary service.
Before they could set up a hybrid-power market, Almendras said they will have to wait until the ancillary production levels will improve. “There should be enough reserves. And when the coal-fired start operation, perhaps it could also be possible to have the baseload capacity from coal fired power plant, while the hydroelectric power plants are shifted to ancillary.”
Almendras also said that for as long as there is rain there is enough power supply in Mindanao. Supply there becomes critical only during an El Niño season.
“But nevertheless we don’t think we can implement WESM in its full form in Mindanao. So we’re trying to pick what is needed to establish a semidynamic spot market in Mindanao. It can be supply bidding or nomination format, we’re studying all sorts,” Almendras said.
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