Power reserve outlook in Luzon alarmingly thin

by Lenie Lectura - May 3, 2016
http://www.businessmirror.com.ph/power-reserve-outlook-in-luzon-alarmingly-thin/

An updated power-supply demand outlook for the second quarter of the year shows power reserves in Luzon would remain alarmingly thin starting on the third week of May until mid-June this year.

When reserves are thin, the grid is on yellow alert. A yellow alert is issued by the National Grid Corp. of the Philippines (NGCP) when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this is equivalent to 647 megawatts (MW), or one unit of the Sual power plant.

“We may experience frequent yellow alerts starting May 16, even with the dispatch of the Malaya power plant. This situation of inadequate contingency reserve is forecasted to persist until June 13,” Manila Electric Co. (Meralco) Head for Utility Economics Lawrence S. Fernandez said.

A three-month power outlook ending May indicated that peak demand is expected to occur on May 18 at 9,737 MW. This is higher than an earlier assessment for the same period released in early March. Historically, the highest demand is recorded in May.

“The major difference is that peak demand for Luzon is now projected to reach 9,737 MW, an upward 373-MW adjustment from an earlier forecast of 9,365 MW,” Fernandez said.

The updated data was presented to industry stakeholders during a recent meeting held at the Department of Energy (DOE).

“In the March version of the forecast, the Luzon grid could still avoid yellow alerts through the dispatch of Malaya,” the Meralco official said.

The state-owned Malaya power plant is already on stream as a must-run unit during weekdays, where power demand is higher compared to weekends. A must-run unit must provide needed power supply on real-time basis to ensure reliability of power supply in the grid, especially when there’s a shortfall.

Moreover, Luzon already recorded a peak demand of around 9,600 MW on April 14, exceeding an old forecast of around 9,400 MW.

The prolonged El Niño and unavailability of some power plants during the period were the main factors why NGCP and the DOE revised their outlook.

“The demand forecast was raised to consider many ongoing effect of warmer temperatures due to El Niño, which is expected to last until June this year,” the Meralco official said.

A warmer temperature results in higher demand for electricity. It is estimated that every degree change in temperature translates to approximately 5 gigawatt-hours of energy consumption, Meralco said.

“The higher consumption of our customers is attributed to a number of things. Clearly, temperature is a factor,” Meralco President Oscar Reyes said. Also, there are power plants that were supposed to be available during the period but are no longer included in the updated forecast. The DOE said the high demand drains power reserves and pushes power plants to their limits.

The DOE earlier directed power producers to reschedule the maintenance work of their power plants after elections. They obliged, but the agency said the sudden shutdown—most were due to technical glitches—of some power plants was already beyond its control.

“The DOE is not the power-plant operator. It’s out of our hands if some power plants suddenly went on forced outage,” Energy Secretary Zenaida Y. Monsada said, adding that “we can only remind and review from time to time their operations, particularly if their plants are running smoothly or not.”

According to NGCP, these two plants are Unit 1 of Malaya plant, with 300 MW of capacity, and Unit 4 of Kalayaan pumped-storage hydro plant, with 178 MW. This means that 478 MW would be shaved off from the Luzon grid.

Meralco was also informed about these two power facilities. “For the power plants, NGCP reported earlier that Malaya 1 [300 MW] will be coming back online on May 6, while Kalayaan unit 4 [180 MW] won’t be back in time for the elections, but is expected to be back by May 14,” Fernandez said. Based on Meralco’s data, demand grows a little more than 3 percent year-on-year. So far, the demand has doubled to 6 [percent to 7 percent this year.

Meralco, the country’ s largest distribution utility serving over 5 million customers, said the revised forecast of power demand and supply would help the company to plan ahead during critical times, particularly in summer when demand for electricity is at its peak.

In relation to this, Meralco has filed with the Energy Regulatory Commission (ERC) for the approval of the power supply agreements (PSAs) with various power producers:

■ 225 MW from Redondo Peninsula Energy Inc.’s 300-MW coal plant in Subic, Zambales.

■ Up to 400 MW from St. Raphael Power Generation Corp., which intends to put up a 2 x 350-MW coal plant in Calaca, Batangas.

■ 1,200 MW from Atimonan One Energ Inc.’s 2 x 600 MW coal plant in Quezon.

■ 528 MW from Central Luzon Premiere Power Corp.’s 4 x 150-MW coal plant in Pagbilao, Quezon, which is scheduled to be operational not later than 2021.

■ Up to 528 MW from Mariveles Power Generation Corp.’s 4 x 150-MW coal plant scheduled to be operational not later than 2020 in Bataan.

■ Up to 70 MW from Panay Energy Development Corp., which owns the 2 x 82-MW and 150-MW coal facility in La Paz, Iloilo. The facility is scheduled to become operational by August 26 this year.

■ 600 MW from Global Luzon Energy Development Corp.’s 2 x 335-MW coal plant, scheduled to be operational by 2022.

The PSAs shall become effective upon approval of the ERC, Meralco said.