By
Lenie Lectura - December 22, 2016
The 20-day shutdown of
the Malampaya gas facility next year will result in an increase of about P1 per
kilowatt hour (kWh) in power generation cost, according to the Department of
Energy (DOE).
According to Energy
Secretary Alfonso G. Cusi, Manila Electric Co. (Meralco) submitted a price
simulation, which shows a projected increase in generation charge of around
P1/kWh.
Generation cost is a
major component of an electricity bill. The price hike will be reflected in the
March 2017 bills of customers. “There will be an increase, but what we will do
is to minimize the increase to soften the burden to our consuming public,” Cusi
said. The natural-gas plants fueled by Malampaya provide around 40 percent of
Meralco’s supply requirements. The rest are sourced from bilateral contracts
with generation companies and the Wholesale Electricity Spot Market (WESM).
During the shutdown, Meralco would have to source power from other sources, such
as power supply agreements (PSAs) and source from WESM.
The gas plants would
still run, albeit on liquid fuel, which is more expensive than gas. In the
past, instances of shifting to liquid fuel have always been higher than the
cost of Malampaya gas.
Cusi said Meralco’s
price-simulation factors in possible adjustment in WESM prices and the
generation cost of natural gas plants due to change in liquid fuel. The
DOE chief, however, assured electricity consumers that the shutdown of the
Malampaya gas
facility “should pose no substantial impact to supply of electricity”. During the shutdown, which is scheduled from January 28 to February 16, there would be a projected electric-supply deficit of about 700 megawatts (MW). “My directive was clear—the Malampaya maintenance activities should pose no substantial impact to supply of electricity by using all available resources and remedies, because power is a basic necessity for our countrymen,” he said.
facility “should pose no substantial impact to supply of electricity”. During the shutdown, which is scheduled from January 28 to February 16, there would be a projected electric-supply deficit of about 700 megawatts (MW). “My directive was clear—the Malampaya maintenance activities should pose no substantial impact to supply of electricity by using all available resources and remedies, because power is a basic necessity for our countrymen,” he said.
He added that plans and
alternative modes should be in place and ready before the actual shutdown. “We
have to ensure that the program works for Malampaya is within the prescribed
schedule given to the DOE. Historically, SPEx [Shell Philippines
Exploration Corp.] completed its maintenance period on time. It is expected
that it will do the same this time,” Cusi said.
He said preparatory
activities among industry stakeholders have started. These activities are meant
to protect consumers from the adverse impact of the shutdown on the supply and
price of electricity.
In a meeting with
industry participants on December 15, the DOE was apprised by SPEx of the
preparatory works for the Malampaya services maintenance shutdown (SMS).
According to SPEx, the
maintenance activities will cover the repair of the subsea facilities, upgrades
on the platform and maintenance on the onshore plant. On the power situation
outlook, the National Grid Corp. of the Philippines (NGCP) was tasked to
simulate the possible power-supply scenarios, while the Philippine Electricity
Market Corp. (PEMC) will conduct a simulation on the WESM prices during the
Malampaya SMS. “The simulations will be submitted to the DOE for review and
evaluation, so that we will be able to accurately respond to any unwarranted
power market behavior,” Cusi said.
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