Thursday, October 26, 2017

Peakpower looks to add 70 MW capacity



By Danessa Rivera (The Philippine Star) | Updated October 26, 2017 - 12:00am

CONCEPCION, Iloilo  , Philippines  —  Peakpower Energy Inc. (PEI) plans to add another 70 megawatts (MW) of peaking capacity across the country after focusing its developments in Mindanao, a top official said yesterday.
The company sees potential in developing another 60-70 MW of peaking plants in Luzon, Visayas and Mindanao next year, PEI president and chief executive officer Roel Castro said.
“Actually there are still prospects for next year. I just couldn’t say where because we haven’t signed any contract yet. If I’m not mistaken, a potential of another 60-70 MW,” he said.
Peaking plants are power facilities that run during peak hours to meet the sudden surge in power requirements in a grid.
For this year, PEI will complete the expansion of its existing peaking plants in Mindanao.
“All expansion should be finished within the year, so that would bring us to a total of 55 MW of peaking plant in Mindanao,” Castro said.
Under Peakpower Soccsargen Inc., PEI has completed the 13.9-MW expansion for the existing 20.9-MW diesel/bunker-fired power plant in Gen. Santos City.
“Our expansion is done, in fact we have the provisional COC (certificate of compliance) for that. What I think is it’s a matter of weeks when we will declare commerciality. Well, after some technical tests are done,” Castro said.
Another PEI unit, Peakpower San Francisco Inc. is doubling the capacity of its 5.2-MW diesel/bunker-fired power plant in San Francisco, Agusan del Sur.
Castro said the project will also start commercial operations after completing technical tests.
Lastly, Peakpower Bukidnon Inc. is constructing a new diesel-fired power plant with a capacity of 10.4 MW in Manolo Fortich, Bukidnon.
Castro said the expansion project is in the final stage of development and should be ready for commercial operations within the year.
“We are in the final stage of performance test but we’re scheduling it next month, in November. After that, that should be ready for commercial as well,” he said.
PEI is a subsidiary of listed A Brown Co. Inc. (ABCI). Apart from PEI, ABCI also has other energy investments, including the 2x135-MW coal-fired Palm Concepcion Power Corp. in Iloilo.
ABCI is also a key player in real estate and agribusiness in Southern Philippines with investments in mining and infrastructure.

PEMC seeks higher spot market fees



By Danessa Rivera (The Philippine Star) | Updated October 26, 2017 - 12:00am

MANILA, Philippines — Philippine Electricity Market Corp. (PEMC), the operator of the country’s wholesale electricity spot market (WESM), is asking regulatory clearance to jack up its market fees to raise additional funds to cover its operations.
PEMC filed an application with the Energy Regulatory Commission (ERC) to approve its P882.21-million funding requirement to cover its expenditure program.
Initial figures peg the market fee rate of 1.04 centavos per kilowatt-hour (kwh).
The proposed amount covers personal services, which pertain to the salaries and benefits of its 160 employees in Luzon and Visayas.
It will also fund PEMC’s maintenance and other operating expenses, as weill as capital expenditures, which consist of enhancements and upgrades to the Market Management System (MMS) and corporate infrastructure, and the cost of lease improvements.
The amount also takes into consideration PEMC’s cost of the preparations and initial operations of the WESM in Mindanao next year.
The fees will be collected from the WESM participants in Luzon and Visayas only, pending the commencement of commercial operations of WESM in Mindanao.
WESM Mindanao commenced trial operations last June 26, serving as a transition period for energy stakeholders.
The trial operations program contains a set of preparatory activities that aim to familiarize all Mindanao participants in the implementation of the WESM via the market systems and procedures to be deployed.
PEMC said Mindanao participants are expected to be involved in the conduct of end-to-end testing of all interfaces and systems that will involve simulations of all processes such as registration, bid submission, pricing and scheduling, and settlement.
WESM Mindanao is expected to start commercial operations next year.
The establishment of WESM in Mindanao is a high priority agenda of Energy Secretary Alfonso Cusi, as underlined in Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
In Luzon, WESM commenced commercial operations on June 26, 2006 while the Visayas grid was integrated into the WESM on Dec. 26, 2010.
EPIRA paved way for the creation of WESM, which serves as a trading facility for power generators and buyers of electricity such as distribution utilities. Under the law, prices at WESM should be governed by market forces.
The law also provides that WESM rates could be passed on to consumers under the generation charge component of their electricity bills.

Meralco, Tarlac solar firm seek regulator’s nod for supply deal



By Lenie Lectura -

THE Manila Electric Co. (Meralco) and Solar Philippines Tarlac Corp. (SPTC) are seeking regulatory approval to implement their power supply agreement (PSA). The two claim that the timely implementation of the signed agreement will “best serve the interests” of consumers.
Under the PSA, SPTC will supply Meralco 75 megawatts (MW) to 85 MW for five years and another 85 MW from the sixth up to the 20th year for P2.9999 per kilowatt-hour (kWh). This rate is significantly lower than the prevailing solar feed-in-tariff (FiT) rates. For one, the simulated delivered price under the PSA would be P3.099 per kWh, significantly lower than the prevailing FiT rates and the lowest tariff offer that Meralco has received for a solar technology. This will result in a reduction of Meralco’s generation charge by about P0.0033 per kWh.
“The simulated delivered price of P3.099 per kWh provides for a much lower cost of power compared to the simulated effective cost at the Wholesale Electricity Spot Market (WESM) of P3.8524, thereby resulting in savings to the consumers of about P0.7525 per kWh,” an 18-page application filed before the Energy Regulatory Commission (ERC) said.
The two firms claim that if implemented, the PSA would also contribute to the government initiative of encouraging the development of renewable energy (RE) in the country.
“The commission’s approval of the PSA will send strong signals to renewable or solar energy-generation projects in the Philippines and, thus, set the pace for infusion of similar investments by the private sector,” Meralco and SPTC said.
Meralco said it needs to source additional peaking capacity through bilateral power supply contracts to ensure its customers of continuous and reliable electricity.
Based on the power situation outlook for 2017 and succeeding years, Meralco foresees a peaking capacity deficit in its portfolio due to the expected high demand, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants. Based on its distribution development plan for the period 2015-2024, Meralco’s aggregate capacity requirement is forecasted to grow by a compounded average growth rate of 3.7 percent.
“It bears emphasis that based on Meralco’s foreseen peaking capacity deficit, there is an urgent need for the provisional approval of the PSA,” the application said. The firms also asked the ERC that “after hearing on the merits, render a decision approving the PSA between Meralco and SPTC.”
SPTC is building and shall own, operate, manage and maintain a solar-power plant capable of supplying up to 85 MW, which is located in the municipality of Concepcion, Tarlac.
“Considering that SPTC’s solar-power plant is expected to achieve commercial operations in the fourth quarter of 2017, an immediate implementation of the PSA would redound to the benefit of the consumers in terms of environmental benefits,” they added.