Some coal plants defer shipments due to low power demand

Published May 20, 2020, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2020/05/20/some-coal-plants-defer-shipments-due-to-low-power-demand/

A number of coal plants in the country have been deferring schedules of their coal deliveries because of declining electricity demand, not exactly a case of logistical obstructions, the Department of Energy (DOE) has noted.

That somehow countered an earlier status report of the Independent Electricity Market Operator of the Philippines (IEMOP), the operator of the Wholesale Electricity Spot Market (WESM), in which it stated that “the restriction of supply from coal plants may be a result of logistical delays in the transportation and delivery delays of coal brought about by the extended enhanced community quarantine.”

The WESM operator further indicated that such scenario among coal plants would require shift in the availability of power plants in the system, which in the process could drive up electricity rates.

The power plant owners and operators are required to declare the state of availability of their capacities in the WESM because of the prevailing must-offer rule; and for them not be to thrown with allegations of capacity withholding which is a form of anti-competitive behavior in the spot market.

Apparently though, there is a mismatch in the pronouncements of the DOE and IEMOP that may warrant scrutiny as to which entity is really giving accurate and reliable facts, because such inconsistency could have implications on the overall operations of the country’s electricity system.

The energy department reiterated “some power facilities are deferring their scheduled coal shipments because of lower power demand, and not because of logistical delays.”

The DOE added that based on the report-submissions of the coal-fed generating plants, “their number of days of full load operation averages at 47 days.” And that the department claimed “is way beyond the 30-day requirement.”

The energy department further noted “out of the 28 coal-fired power plants in the country, 18 have submitted their coal inventories as of April 28, 2020.”

Given the current situation in the power system which is generally straddling on lower demand compared to last year’s summer months, the DOE emphasized it is “continuously processing certificates of compliance for coal importation, even after the announcement of the ECQ.”

To recall, many power companies at the start of the ECQ had raised complaints on snags of their fuel shipments, including securing clearances from the Bureau of Customs (BoC) because of the initial chaos that the lockdown had triggered then.

Nevertheless, that was later resolved and the bottlenecks had been gradually addressed – and processes had turned smoother as the ECQ stretches into several weeks more.