ERC okays ancillary NGCP services contracts

Manila Bulletin 
Published: July 9, 2013 
With grid reliability becoming an intensifying question at every strike of brownouts, the Energy Regulatory Commission (ERC) has fast-tracked approval processes for the ancillary services procurement agreements (ASPAs) entered into by the National Grid Corporation of the Philippines (NGCP) with power generators.
Its latest approved ASPAs are those with Therma Luzon, Inc.  (TLI) of the Aboitiz group for ancillary services to be supplied from the Pagbilao coal-fired plant; and the other with SN Aboitiz Power, Inc. (SNAP) for supply from the Magat hydropower plant.
For the ancillary services deal with TLI, NGCP contracted for 60 megawatts of contingency reserve or the generating capacity intended “to take care of sudden and unexpected loss of the large synchronized generating unit or the power import from a single grid interconnection.”
This particular ASPA, according to the ERC, is “on a firm and non-firm basis.” The provisionally-approved rate for firm contracted capacity had been set at P1.50 per kilowatt hour (kWh); while the non-firm rate was at P2.25 per kWh.
For ancillary services procurement from the Magat plant, the deal covered 95 megawatts of regulating reserve and 60MW of contingency reserve at off-peak hours only.
Regulating reserve is one component of contingency reserve. It is also called the “spinning reserve” which sets the ability of a generating unit “to provide generating capacity necessary to respond immediately to infrequent, but usually large failures of generating units and/or transmission lines.”
On firm contracting basis, the applicable rate for the Magat ASPA will be P2.50 per kWh for regulating reserve; and P1.50 for contingency reserve.
The non-firm contracted capacity will be priced as follows: P3.00 per kWh for regulating reserve; P2.25 per kWh for contingency reserve; P1.25 per kWh for dispatchable reserve; and P2.14 per kWh for blackstart capability.
“The ASPA is on a firm and non-firm bases,” the ERC said, further noting that the contracted ancillary services capacities shall be “made available at all times for NGCP’s instruction and dispatch” – with exceptions only on circumstances as provided under the ASPA.
The regulator directed NGCP to “pay SNAP-Magat at the proposed rate for the said firm capacities whether or not such capacity is scheduled or dispatched.”
Under the non-firm basis, the ERC noted that the power generators have “the right or option not to nominate any capacity for ancillary services even if it is available while NGCP may or may not schedule the capacity nominated without any corresponding penalty or payment.”
The regulatory body opined that such arrangement will give NGCP “the flexibility to evaluate or decide for optimum ancillary services considering the prevailing economic and technical circumstances.” (MMV)   source