Oil-fired and hydropower plants are highest-priced bidders in WESM

Published April 15, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/04/15/oil-fired-and-hydropower-plants-are-highest-priced-bidders-in-wesm/

The oil-fired and hydro power plants have been the “high price trendsetters” in the Wholesale Electricity Spot Market (WESM) during precarious supply situation in Luzon grid – with their bids ranging from P20 to P32 per kilowatt hour (kWh), data culled from the operator of the spot market showed.

The Limay oil-fired plant of Panasia Energy, Inc. had been making offers ranging from P22 to P32 per kWh since the series of yellow alerts had been raised starting on April 1 and that was seen sustained for several days.

But according to Noemi Moreno, PanAsia Energy officer-in-charge, their Limay plant was never cleared at P32 per kWh because their capacity is contracted for the ancillary services needs of system operator National Grid Corporation of the Philippines.

Oil plants serve the peaking needs of the electricity system; and when supply is tight, they are called for dispatch and it is generally expensive to utilize them because of their fuel costs.

Another oil plant constantly bidding at a high price of P32 per kWh had been Bauang thermal facility of 1590 Energy Corporation of Vivant Corporation; then the One Subic Power Generation Corporation and Trans-Asia Power Corporation were making price offers of P20 to P27 per kWh – both plants are asset acquisitions of the Ayala Group.

The Angat hydropower plant was similarly making pricey bids of P20 to P27 per kWh; while the government-run Kalayaan hydropower plant being managed by Power Sector Assets and Liabilities Management Corporation (PSALM) had been constantly hitting the highest price offer of P32 per kWh.

It has also been apparent that for the generation companies (GenCos) which reported forced outages on their power fleets, they have other generating plants being made available to the market – but they claimed they’re not benefitting from the cleared high WESM prices because their capacities are fully contracted.

The generation companies said they have been sourcing replacement power either from some of their other plants or from the WESM, but with no pass-on to the consumers – with Aboitiz Power noting that it has been “taking the heat” on the cost of sourcing higher priced power from the spot market – especially for the its retail customers catered to by the Pagbilao-3 power plant.

Aboitiz Power Chief Operating Officer Emmanuel V. Rubio said the Pagbilao-3 plant that had been on shutdown has not been supplying to residential end-users
For one, Pagbilao-3 plant which is the joint venture of Aboitiz Power Corporation with TeaM Energy Philippines had been on outage for roughly two weeks already – and has essentially not been selling or trading any kilowatt-hour into the market.

However, the other Aboitiz plants were making offers in the market within that duration – including its older Pagbilao plant; Tiwi and Makiling-Banahaw geothermal plant; its GNPower Mariveles plant which is its joint venture with the Ayala group; and the Magat which is committed to the ancillary services requirements of NGCP; then Ambuklao-Binga hydro plants.

For the Ayala group which reported unplanned outage at its South Luzon Thermal Energy Corp (SLTEC) coal plant, it was seen fetching revenues from its other plants – including the oil plants making high bids and its GNPower Mariveles coal plant.

San Miguel, for its part, has reported forced outages at the unit 2 of its Limay coal plant and Sual unit 1, but it has its other units of those plants available in the market; plus its Masinloc, Ilijan, Angat and San Roque generating facilities. San Miguel said it is taking replacement power from San Roque plant at “fixed cost” and is not exposed to the volatility in the WESM.

For the Consunji group, the unit 2 of its Southwest Luzon Power Generation Corp. (SLPGC) plant had been on forced shutdown, but the other unit as well as its Calaca generating fleets had likewise been called for dispatch at many trading intervals. It also assured of no pass-on cost to the consumer on its procurement of replacement power.