NGCP warns of looming power shortage

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) is urging government agencies to address the looming power shortage in Luzon in the summer months.

In a statement, NGCP said thin electricity supply is projected between April and June, even with an expected incoming 700 megawatt (MW) capacity from new power plants.

Based on Department of Energy (DOE) data, total system peak demand is estimated to reach 12,285 MW for Luzon in May. This marks an increase of 8.3 percent from the actual 2019 peak demand of 11,344 MW.

For Visayas and Mindanao, peak demand for both regions occur in May, a shift from previous years when peak demands were recorded during the last quarter of the year.

“There appears to be a shift in the way consumers use power. Luzon’s annual peak demand was long driven by increased use during the hot summer months. Mindanao and Visayas peak usage usually occur at the end of the year,” NGCP said.

“The regulator and authorities must take a closer look at the shifts in peak demand and strategize short term and long term solutions to address the ever increasing need for power vis-à-vis power consumption trends,” the company said.

NGCP said the Luzon grid needs around four percent of the peak demand, or around 491 MW in regulating power to stabilize the grid.

The grid operator also needs to maintain power equivalent to the largest plant online (usually equivalent to 647 MW) as contingency power to support the grid in case of an emergency power plant shutdown.

A yellow alert will be issued should the net operating margin fall below these numbers while a red alert will be raised if the power supply falls below the system peak demand.

This means that load dropping or rotating power interruptions may be implemented to protect the integrity of the power grid.

“Power supply takes more than just a plus-minus strategy. Types of power technology, power plant location, use habits and trends, and lead times for installation of additional capacity must be taken into account when developing the country’s power development plan. Otherwise, the default strategy will always revert to stop gap measures,” NGCP said.

With the planned outages factored in, Independent Electricity Market Operator of the Philippines Inc. projects tightness of supply sometime in May or June.

But in a worst case scenario, wherein IEMOP factored in forced outage of power plants by as much as 600 MW to 1,200 MW, the market operator expects very tight supply as early as March.

But despite the tight supply situation this summer, IEMOP COO Robinson Descanzo said WESM prices are still expected to be lower this year compared to last year.

January WESM prices reached P3.03 per kilowatt-hours (kwh) this year, lower than the P4.63 per kwh in the same month a year ago.

In February, WESM prices peaked to P3.47 per kwh, lower than the P4.33 per kwh in the same month last year.

The lower rates this year is due to severe power supply shortage in the past year.

To address the summer supply concerns, Energy Secretary Cusi said the agency met with energy firms earlier this week.

Cusi said the country’s largest power distributor has been preparing for the summer period by securing interim power supply.

“In fairness to Meralco, they have been preparing for and they have contracted plants to source their power this summer,” he said.