Jica: Government should start securing excess power supply

Manila Standard Today
by Lorenz S. Marasigan - November 14, 2014

TOKYO, Japan—The Philippine government should start securing additional power supply as early as now to at least alleviate, if not completely address, the looming power shortage that would hit Luzon in the first half of 2015.

This was the recommendation of officials from the Japan International Cooperation Agency (Jica) for the Aquino administration, which struggles to address the projected 700-megawatt (MW) shortfall in power supply next year.

“The role of the government is very important in addressing the power shortage in the short time. The government should play a certain role, which is preparing for the shortage by securing excess power supply,” Jica Deputy Director for the Philippines Toru Yoshida said in an interview.

Jica Southeast Asia and Pacific Department Advisor Shunei Shinohara noted that his agency is planning to assist the Philippines in addressing this forthcoming problem.

“Future assistance will put emphasis in improving and applying existing regulations. The law is there; we can propose something to better apply them,” he said.

“One of the examples,” Shinohara quickly added, “is the financing of the action plan of the government to improve various aspects on the institutional side, and the application of existing regulations. We are also planning to do something in relation to improving disaster resilience.”

Filipino energy officials earlier urged Congress to issue a joint resolution to authorize President Aquino to deal with the power crisis. This venture would allow the country’s Chief Executive to establish additional generating capacity under certain terms and conditions.

Such provision is enshrined in Section 71 of the Electric Power Industry Reform Act (Epira), a law that prohibits the government from setting up power plants.

When approved, the draft resolution would grant the President the authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase.

Lawmakers, however, were lukewarm to the idea, citing a projected shortfall of only 31 MW at any given day from March to June 2015.

But aside from the projected 31 MW of anticipated daily generation deficiency, the country is in need of three kinds of power-reserve requirements—regulating reserves, contingency reserves and dispatchable reserves, energy officials pointed out.

Director for Electric Power Industry Management Bureau Myleen C. Capongcol explained a 350-MW regulating reserve is meant to ensure the system reliability of the power grid; 647 MW for contingency reserve, which is equivalent to the highest online power plant when it suddenly conks out; and another 647 MW of dispatchable reserve for offline plants that can be switched on when power supply falls.

She noted that the Philippines needs to raise all these kinds of reserves. But, since it is too huge, her agency is only eyeing to meet the contingency reserves of 647 MW.

Given this, the Luzon grid is in need of 678 MW to cover the 647-MW contingency reserve and the 31-MW gap.

Energy Undersecretary Raul B. Aguilos said his agency has received 424 MW in firm commitments from industry stakeholders; but this was already factored into the government’s computation.

For now, the government is banking on the Interruptible Load Program (ILP) to cover the needed 700-MW capacity.

Under ILP, its participants will be called upon to voluntarily use their respective generating sets. Through this, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Thus, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.

The Manila Electric Co. (Meralco) has so far signed up 155 MW of accumulated committed interruptible load capacity from various ILP participants. Meralco is the largest distribution utility in Luzon.

Officials from the energy department, however, noted that only half of that capacity will turn out as actual capacity that can be deloaded based on previous incidents.

The looming power shortfall would consist of 14 weeks yellow alert and two weeks of red alert for a total of 16 weeks of approximately one to three hours of brownouts for a day per week. source