Power shortage threatens Luzon grid as some power plants, Malampaya go on scheduled maintenance shutdown in Oct

By Lenie Lectura - September 17, 2019

https://businessmirror.com.ph/2019/09/17/power-shortage-threatens-luzon-grid-as-some-power-plants-malampaya-go-on-scheduled-maintenance-shutdown-in-oct/

Some 600 megawatts (MW) to 900 MW of power-generating capacity will be shaved off from the Luzon grid next month due to scheduled maintenance shutdown of some power plants, a top official of the Manila Electric Co. (Meralco) said Monday.

Meralco President Ray Espinosa said the scheduled maintenance shutdown of various power plants that supply the utility firm will coincide with the four-day maintenance shutdown of the Malampaya natural gas facility, which also supplies 40 percent of Meralco’s requirement.

“We have alerted the DOE [Department of Energy] already that there are scheduled outages already in October as early as the first week. Within the first week, 600-900 megawatts will be out. That’s scheduled but still, its good to have enough supply,” said Espinosa.

Data from Meralco showed that Ilijan unit 1 (600 MW) will be on scheduled maintenance shutdown from October 3 to 15. The same plant will also produced less capacity from October 16 to 18.

Other power plants that are on scheduled shutdown next month are the 20-year-old Sual 2 (500 MW) from October 19 to November 17; San Lorenzo Module 50 (250 MW), from October 26 to 30.

The Malampaya gas facility, meanwhile, will not be able to supply Meralco from October 12 to 15.

The gas facility fuels the following gas plants: the 1,000-MW Santa Rita, the 500-MW San Lorenzo, the 1,200-MW Ilijan, the 97-MW Avion and the 414-MW San Gabriel.

Meralco partly sources its requirements from the Santa Rita, San Lorenzo, San Gabriel plants of First Gas Corp. and from South Premier Power Corp.’s Ilijan plant. The utility firm does not have a power-supply agreement with First Gen’s Avion plant.

Meralco head of utility economics Lawrence Fernandez said the company is in coordination with the different power plants that use Malampaya gas for fuel. During the shutdown, Santa Rita, San Lorenzo and San Gabriel will be ready to run on liquid fuel so that their capacities will continue to be available to the grid. The Ilijan plant, meanwhile, will be on maintenance shutdown during the Malampaya shutdown.

“We understand that the maintenance shutdown activity will span four days and that half of the period will be over the weekend,” he said.

Meanwhile, a DOE official said the Malampaya shutdown is “not critical.”

“We are coordinating with the system operator, the National Grid Corp. of the Philippines. They have suggestions. It’s not critical because demand is not that big in October. It will be well managed. There are gas plants that will run on diesel, condensate,” said DOE Director Mario Marasigan who was present during the power-supply agreement (PSA) signing of Meralco’s 500-MW contract capacity with power producers.

DOE Assistant Secretary Redentor Delola, in a text message, said the Luzon grid will have sufficient reserves for the rest of the year due to decreasing demand and additional capacities from new power plants coming online.

For Luzon, he cited the 300-MW Masinloc expansion project set to commence this month and the 500-MW San Buenaventura Power Ltd. (SBPL) project of Meralco Power Gen Corp. Both are expected to inject power to the grid this month.

SBPL is  a partnership between MGen and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. (EGCO Group) of Thailand.

However, SBPL’s  455-MW coal-fired power plant in Mauban, Quezon, has hit a snag.

The country’s first coal-fired power plant to use supercritical technology was supposed to start commercial operation last September 15. The electricity  to be generated by the P56.2-billion plant will be sold to Meralco, the country’s largest distribution utility, under a 20-year power-supply agreement.

Meralco was actually expecting this power plant to supply its requirement starting next month. Espinosa said SBPL is one of the plants listed under Meralco’s contingency plans when the Malampaya gas facility is on shutdown.

“We have contracted plants but this San Buenaventura is very important, it will at 455-MW net capacity and you know supply is always tight, so we need additional capacity,” he said.

However, Meralco was lacking a permit from the Energy Regulatory Commission (ERC). “We were targeting San Buenaventura to go online, commercial operation date on September 15. But the ERC has not yet issued the provisional authority to operate and the COC [certificate of compliance]. Without those, San Buenaventura cannot go online and supply power,” said Espinosa.

When asked to elaborate about the permits, Espinosa said, “the ERC asked a question regarding the water use.”

“The water rights have been issued in favor of Meralco by the National Water Regulatory Board and once it is in the hands of a qualified Filipino, it can be used by anyone already. We were really surprised about this. We have actually asked [DOE] to help us also to resolve the issue of water rights,” said Espinosa.

This year’s Malampaya scheduled maintenance shutdown will cover technical work at offshore platform (West Philippine Sea) and at onshore gas plant (Batangas); repair of equipment; installation of critical spare parts; check of instrumentation and controls.

“The shutdown will allow engineering maintenance works at both onshore gas plant and offshore platform,” said Shell Philippines Exploration BV (SPEx). “We are aiming to make shutdown duration as short as possible to minimize impact to natural gas supply. This shutdown is relatively short compared to previous ones.”

The Malampaya consortium is composed of SPEx, with a 45-percent stake; Chevron Malampaya Llc., also with a 45-percent stake; and PNOC-EC (Philippine National Oil Co.-Exploration Corp.), which holds the remaining 10 percent.