Tuesday, April 16, 2019

DOE, gencos: Collusion didn’t cause brownouts


By Lenie Lectura - Last updated on

THE Department of Energy (DOE) and the power-generation firms on Monday firmly denied that lack of planning and collusion were to blame for last week’s rotational brownouts that hit Luzon.
This, as the Luzon grid was placed on red alert on Monday, the fourth time this month. The alert notice was eventually lifted at 3:10 p.m.
The main culprit, according to DOE Undersecretary Felix William Fuentebella, is the forced outage of old and relatively new power plants.
He said several power plants, with a total capacity of 1,500 megawatts, bogged down due to various technical glitches. The DOE cited two more reasons: the capacity of some power plants got derated by around 111 MW, and the scheduled maintenance shutdown of power plants shaved off 872 MW of capacity from the Luzon grid.
“This is a very high number. It was caused by forced outages. The impact of 2,500 MW is enough to power the entire Mindanao grid. That is how big it is.                
The problem is forced outages occurred.  Unplanned is unplanned, forced is forced unless plant managers tell us a formula on how we can see ahead.
Pumalya ang mga planta [The plants simply failed],” said Fuentebella at Monday’s news conference.
Asked if there was lack of planning on DOE’s part, Fuentebella said, “No. We should focus on the problem, and the problem is on forced outage. It’s not supply. Dugtong dugtong ang problema. But no, walang pagkukulang sa planning. Magkakaproblema lang iyan sa focus. Kahit may planning ka, kung wala ka namang focus [The problems are interconnected. But no, there was no failure in planning. A problem will only arise in terms of focus. Even if you have planning, you’ll have a problem if you lack focus],” the DOE official said.

Gencos: No collusion

Meantime, representatives of power-generation firms present disputed suspicion of collusion, pointing out that they don’t profit at all if their plants are not
delivering power.
AboitizPower Chief Operating Officer Emmanuel Rubio said the capacity lost is being replaced by buying from the Wholesale Electricity Spot Market (WESM). However, they do not pass on to consumers the higher spot market prices.
“Only when a plant is running [do] we make revenues, because that’s the only time we can sell power to consumers. We’re losing money because 200 MW is out. We are contracted beyond the capacity we operate. We rely on some our facilities, we rely on WESM. The WESM price hit P9, but we sell P3 to our customers,” Rubio said.
Pagbilao 3, which was put up by Aboitiz and Team Energy Corp. , is a new plant that began commercial operation in March 2018. It was scheduled to resume operation today (April 16) after conking out.
Team Energy, which operates the 20-year-old Sual power plant, also said that the plant’s output is fully contracted. “It is not in our best interest if the plant is on shutdown. Revenue is lost and at times we source replacement energy from WESM,” said company representative Froilan Gregory Romualdez.
The DOE and the power generators assured the public that no costs are passed on to consumers. “We have policies in place that protect consumers. We have a policy on ancillary service that is being drafted, a price-determination methodology that can be included in the planned causer’s pay policy,” said Fuentebella.
The DOE submitted data to the Energy Regulatory Commission (ERC), which is in a better position to determine if there was collusion involved or if the reasons for the forced plant outage match that of the ERC’s findings.
“What we can only say is this. Lahat ng impormasyon na makukuha natin, ibibigay natin sa ERC, PCC, Congress lalong lalo na kay Pangulo [All the information we get, we pass on to the Energy Regulatory Commission, the Philippine Competition Commission, Congress and especially the President]. At the end of the day, we will remain answerable to all these, and we will try to leave you with as many updates, as transparent and as timely as we can,” he said.

Meralco: Fresh spike likely

The Manila Electric Co. (Meralco), meanwhile, said power rates are likely to spike again this month. The utility firm purchased roughly 10 percent of its power requirements from WESM last month.
“So far, it’s too early to say how much. We usually receive the spot market prices billing by the end of the month. In the first week of March, three days of yellow alert. For April, so far, there are six days of yellow and four red alerts. We think the situation this month is different from March, and [will] have a corresponding impact on spot market prices, in which it has breached to more than P9,” said Meralco utility economics head Lawrence Fernandez.
Meanwhile, the Petroleum Association of the Philippines (PAP) said the recent spate of brownouts underscores the need for the country to focus on energy security or self-sufficiency in energy by being able to draw from its own power stores instead of relying on global markets.
“But there’s no need to look far,” said Rufino Bomasang, PAP chairman. “We have existing indigenous energy at our disposal, such as what we draw from the Malampaya gas field in northwest Palawan. Since natural gas is an indigenous energy, it also helps in energy security.”

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