DOE amends rules on CSP power reserves procurements

Published June 21, 2019, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2019/06/21/doe-amends-rules-on-csp-power-reserves-procurements/

The Department of Energy (DOE) will be enforcing amendments in the procurement of power reserves or the ancillary services (AS) requirements of the National Grid Corporation of the Philippines (NGCP).

The department is re-establishing the framework on securing power reserves that shall be contracted within the ambit of competitive selection process (CSP); and is also tackling a future terrain when the proposed “reserve market,” as component of the Wholesale Electricity Spot Market (WESM), will already be in place.

To strengthen the rules on power reserves’ procurement, a technical working group (TWG) to be co-chaired by the DOE and Energy Regulatory Commission (ERC) for the CSP has to be formed.

In a DOE drafted Circular, it was stipulated that the TWG will “review the existing methodology for determining the required level for each AS category and recommend revisions to applicable rules to the ERC as necessary.”

The TWG will have memberships from NGCP, National Transmission Corporation, Philippine Electricity Market Corporation and the Independent Electricity Market Operator of the Philippines.

Energy Secretary Alfonso G. Cusi has been repeatedly sounding off concern on the need to address adequate reserves for the power system, so electricity service interruptions can be prevented. In fact, reserves inadequacy recurrently torment Luzon and Visayas grids already at this point.

The classifications of power reserves required by the power grids include: contingency and regulating reserves which are classified as primary and secondary reserves; dispatchable which is tertiary reserve; then reactive power support and blackstart as other type of reserves.

A contingency reserve is the power plant that will be ready to plug any capacity loss in the system – and often, this is equivalent to the biggest unit in a power grid; like the 647-megawatt Sual power plant for Luzon.

A dispatchable reserve, on the other hand, is a plant that is not scheduled for regular energy supply or for the other type of AS requirements, and can immediately be dispatched to replenish the contingency reserve.

Reactive power support service accounts for the type of ancillary service to ensure technical reliability of a power system; while blackstart is needed to let the grid quickly recover from a partial or total blackout.

The TWG on the power reserves procurement will also lay down the CSP plan on AS prior to the concretization of the long delayed “reserve market” and what should be the necessary arrangements to be in place after that.

As initially propounded in the DOE Circular, “prior to the implementation of the reserve market (except for tertiary reserves), the full requirement of all reserve categories shall be procured through firm contracts only.”

And once the reserve market is already in place, primary and secondary reserves shall still be procured via firm contracts; while tertiary reserves may be done either through contracts or through trade or purchase from the market.