Generating assets to be sold later
MANILA, Philippines—National Grid Corp. of the Philippines, operator of the country’s transmission network, is considering building its own generating facility in case there will be no power producer available to provide the ancillary services it needs.
“NGCP is not allowed to engage in power generation-related business. The suggestion, however, is worth looking into,” NGCP documents stated.
“NGCP may be given the option to, in the meantime, build generating facilities in case there would be no company that can provide ancillary services and sell the generating assets later, subject to regulatory approvals,” NGCP said.
The procurement of ancillary services by NGCP was said to be crucial in maintaining the stability of the three main grids. These capacities were also needed to maintain a stable and reliable operation of the interconnected transmission system.
Ancillary services refer to standby power supply that can be tapped in case regular supply to the grid falls short of the requirement. These services are necessary to support the transmission of electricity from power resources to load customers, and to maintain the stability, reliability and quality of power services.
NGCP earlier said it was not making money from the current setup because it was merely passing on to user-distributors the same amount it pays power producers whose output are used for ancillary services.
The company claimed that it even absorbed losses from such transactions “because it pays the producers the full amount billed even if it does not collect the full amount from the users.”
The price of the power from ancillary service providers is computed per kilowatt-month and is set based on the peak price during the month covered. The price of the power from baseload plants is computed on per kilowatt-hour basis or based on actual consumption.
This explains the much higher rate charged for the supply from ancillary services providers compared to that of supply from baseload plants.
For a short period, ancillary services had helped ease the rotating brownouts in Mindanao late last year, when NGCP was able to provide such services through its agreement with the Aboitiz-led Therma Marine Inc. This contract allows the provision of ancillary services of as much as 50 megawatts each for Power Barges 117 and 118.
However, power consumers in Mindanao then questioned the high electricity prices arising from the use of the power barges as ancillary services.
“NGCP is not allowed to engage in power generation-related business. The suggestion, however, is worth looking into,” NGCP documents stated.
“NGCP may be given the option to, in the meantime, build generating facilities in case there would be no company that can provide ancillary services and sell the generating assets later, subject to regulatory approvals,” NGCP said.
The procurement of ancillary services by NGCP was said to be crucial in maintaining the stability of the three main grids. These capacities were also needed to maintain a stable and reliable operation of the interconnected transmission system.
Ancillary services refer to standby power supply that can be tapped in case regular supply to the grid falls short of the requirement. These services are necessary to support the transmission of electricity from power resources to load customers, and to maintain the stability, reliability and quality of power services.
NGCP earlier said it was not making money from the current setup because it was merely passing on to user-distributors the same amount it pays power producers whose output are used for ancillary services.
The company claimed that it even absorbed losses from such transactions “because it pays the producers the full amount billed even if it does not collect the full amount from the users.”
The price of the power from ancillary service providers is computed per kilowatt-month and is set based on the peak price during the month covered. The price of the power from baseload plants is computed on per kilowatt-hour basis or based on actual consumption.
This explains the much higher rate charged for the supply from ancillary services providers compared to that of supply from baseload plants.
For a short period, ancillary services had helped ease the rotating brownouts in Mindanao late last year, when NGCP was able to provide such services through its agreement with the Aboitiz-led Therma Marine Inc. This contract allows the provision of ancillary services of as much as 50 megawatts each for Power Barges 117 and 118.
However, power consumers in Mindanao then questioned the high electricity prices arising from the use of the power barges as ancillary services.
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