ERC approval on NGCP-SNAP ancillary services contract sought

Manila Bulletin
by Myrna Velasco March 6, 2014 

System operator National Grid Corporation of the Philippines (NGCP) and provider SN Aboitiz Power – Benguet Inc. (SNAP) are jointly seeking regulatory approval on their newly-concluded Ancillary Services Procurement Agreement. 
The deal provides that NGCP will be procuring specified capacity of AS capacity (firm and non-firm) from the 125-megawatt hydropower facility of SNAP in Benguet. 
The Electric Power Industry Reform Act (EPIRA) requires NGCP to secure its AS requirements from qualified providers so it can reliably operate the country’s power grid and for it to ensure power quality that it delivers to load customers. 
In a statement issued by NGCP, it noted that “after a series of technical testing and evaluation, (it) concluded that the Binga hydroelectric power plant is capable as AS provider for regulating reserve, contingency reserve, dispatchable reserve and black start service.” 
The company further stipulated that its AS requirements for Luzon grid had not reached desired levels yet, hence, they are seeking regulator’s immediate approval on their joint ASPA filing. Public hearing on the case was slated March 2. 
As defined by law, ancillary services are those “that are necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the transmission system.” 
There are specific standards and parameters on how the country’s power grid must be operated and maintained, according to the Grid Code, and a major component of it is sufficient provision of capacity for ancillary services. 
“AS are needed to regulate the frequency of transmitted electricity to avoid fluctuations and to help the system adapt to sudden loss of power supply to prevent the occurrence of massive blackouts,” NGCP has expounded in its press statement. 
The system operator further emphasized that “AS also provides assistance to back-up generating plants that temporarily address the lack of supply in the system,” and such could be depended upon in the event of power loss. 
In the absence yet of a reserve market that will partly address the system operator’s AS requirements, NGCP’s recourse had been to negotiate bilateral ASPA with qualified providers. But that scheme of procurement is about to change soon with the much-anticipated commercial operations of the power reserve market this coming March 26. source