Meralco registers surprise spike in demand in Q3

MANILA, Philippines — The Luzon grid may need more capacity from new generation plants as power distributor Manila Electric Co. (Meralco) has recorded a surprise spike in demand in its franchise area as the year entered its third quarter.

The power distributor said the supply-demand situation in the Luzon grid is now a concern as there have been three instances of yellow alerts raised since Aug. 30, Meralco senior vice president and head of utility economics Lawrence Fernandez said in an interview in a forum hosted by Financial Executives Institute of the Philippines (FINEX) yesterday.

A yellow alert means there are not enough reserves to cover the largest running generating unit at the time but does not necessarily lead to power outages.

 “Our concern, while the situation hasn’t reached red alert yet, is that when power plants trip, it will trigger an automatic load dropping (ALD) which means some of the customers lose electric service because of the tripping of some power plants,” he said.

With Meralco’s ALD scheme, certain areas in its franchise experienced momentary interruptions to help the grid recover from the generation outages.

Moreover, two of these yellow alerts were raised on a Saturday (Sept. 9 and 16), which usually has low demand.

Fernandez said the yellow alert is a result of a confluence of factors which are high demand, especially for a weekend, and power plants—mostly coal—going on forced or unplanned outage.

On Sept. 9, those that went on unplanned outage were Sual 1 in Pangasinan, GN Power 1 and 2 in Mariveles, Bataan and San Gabriel in Batangas.

The occurrence of yellow alerts when Meralco projected flat growth in power demand this year means the new capacities must be injected into the Luzon grid, Fernandez said.

“While more than 1,000 megawatts (MW) of power plants have commissioned in the last year, the rise in demand is soaking up new capacity which means we need more and more capacity to be built in the coming months. The reports, for example, that a new unit in Quezon will be commissioned, that will help,” he said.

He was referring to the the 420-MW coal-fired power plant expansion of the AboitizPower Corp. and TeaM Energy Corp. in Quezon province, which is expected to start running before end-2017.

Earlier this year, Meralco executives projected softer growth in sales coming following a surge in sales volume last year due to the El Niño phenomenon and the election-related activities.

However, Fernandez said in the Meralco area alone, electricity consumption had grown almost four percent to-date despite having registered a robust growth of 8.1 percent in full-year 2016.

“We were not expecting the growth in demand that we experience this year coming off from 2016 with the El Niño and election year,” he said.

Last year, Meralco breached the 40,000 gigawatt-hour consolidated sales volume. But full-year sales growth stood at three to 3.5 percent in 2016, down compared from a growth of 5.6 percent in 2015.