DOE eyes construction of new gas plant in Batangas to beef up electricity reserve

by Lenie Lectura - August 16, 2016

http://www.businessmirror.com.ph/2016/08/16/doe-eyes-construction-of-new-gas-plant-in-batangas-to-beef-up-electricity-reserve/

The Department of Energy (DOE) has asked the Philippine National Oil Co. (PNOC) to study the possibility of constructing a 200-megawatt (MW) gas plant in Batangas that will serve as the state’s power reserve.

If the plan is feasible, the power plant can be put up in 12 to 18 months after results of the study is out, according to Energy Secretary Alfonso G. Cusi after Tuesday’s Senate hearing.

“Under the law, we can’t put up a power plant. So, I asked PNOC if they could do it since they have a property there. We are still studying it, contemplating to do it. There is no decision yet,” Cusi said.

A gas plant, he added, is easier and faster to build than a coal plant.  “We’re rushing. Coal plant takes longer. Besides, gas is clean,”  he said.

During the Senate hearing, Cusi mentioned that the planned 200-MW gas plant would serve as the country’s “army reserve” that would be tapped whenever power supply is no longer sufficient. “The government would  jump-start it,” Cusi said, adding that the private sector could also come in.

But when Cusi was sought for clarification after the hearing if the government would pursue this plan on its own, the energy chief said funding for the proposed project would be shouldered by the government.

Still, the Manila Electric Co.  (Meralco) is willing to assist the government, via the PNOC, on its plan to put up a 200-MW plant.

“Yes, we are supporting it. Whichever is in the best position to do it. It can be a joint venture between the government and the private sector,” Meralco President Oscar Reyes said in an interview.

The lack of power reserves experienced in Luzon last week prompted the DOE to look for ways on how to deal with incidents of insufficient power supply.

The Energy Regulatory Commission (ERC), which recently sent letters to power firms whose plants went on forced outage or went offline due to maintenance schedule, said that 2,299.08 MW of capacity was shaved off from the Luzon grid due to sudden shutdown of power plants. Moreover, some 2,094.7 MW of capacity was lacking from the grid because some plants are on scheduled maintenance shutdown.

“For the period of July 26 to August 5, a total of 20 plants went offline,” ERC Chairman Jose Vicente Salazar said.

The ERC has required the power- generation firms to submit a detailed report on the causes of forced outages. This is in addition to the regular reporting required of them whose facilities have been on forced outage status.

“They have complied. We are regularly monitoring the market if there was anticompetitive behavior committed by the gencos [generating companies]. We have to collect the date on the performance of these gencos and assess thereafter,” Salazar added.

Cusi said the DOE and the ERC are not accusing anybody of committing anti-competitive behavior, but also did not discount the possibility that there could be violations involved.

“We’re just investigating here to make sure that there’s no collusion,” the DOE chief said.

Based on DOE data, Cusi said he is confident that there is no looming power shortage. “Based on the figures I have, we have sufficient supply,” he said, but did not reply when asked until when is this sufficient supply going to last.