MANILA, Philippines — The Department of Energy (DOE) is eyeing to come out with a policy for the mandatory retirement of aging power plants.
In its updated Power Development Plan 2020-2040, the DOE said it is looking to formulate corresponding guidelines for the decommissioning of power plants, particularly those that are over their prescribed economic life span and have not undergone significant system upgrading or improvements over time.
“Plant decommissioning is expected to deliver a number of benefits which include the reduction of unplanned outages due to normal wear and tear of old machinery and equipment, enhancement in power generation production and efficiency, and provision of additional capacity for new power plant entrants to be catered by the existing and upcoming transmission line facilities,” the agency said.
But before this policy is issued, the DOE said it needs to determine appropriate criteria, process, documentary requirements from concerned agencies, and facility exit plan following the decommissioning, among others.
In 2019, the Energy Regulatory Commission (ERC) said that 30 percent of the country’s power plants are 30 years old and above and contribute 15 percent of the total generating capacity.
Those that have been operating from 16 to 20 years account for 29.8 percent of the total generating capacity, while the 21-to-25-year age group takes up 23 percent of the total.
Power plants aged six to 10 years old account for around 10 percent of capacity and the newest, or from zero to five, around 15 percent.
Luzon, in particular, source 72 percent of its capacity from plants that are 16 years old and above, the ERC said.
This was compared to the plants aged 26 to 30 years old that went on forced outage, which accounted for nearly 20 percent.
As more power facilities get older, the reliability of existing power plants also dwindles with time. That was manifested in the numerous instances of yellow and red alert notices in the Luzon grid in 2019.
During the 2021 brownouts, the ERC urged the DOE to come up with a policy on aging power plants.
With the country’s growing list of aging coal plants, ERC chairperson Agnes Devanadera last month urged the government to urgently come up with an energy mix as old plants had suddenly gone into forced outages resulting in thin power supply and, worse, brownouts.
“Another thing is we have very old power plants. Some are 16 years old, and they are still being used so that’s the reason why there should be new capacity,” she said.
The ERC chief said there should be a definite energy supply mix specifying which technology and how much capacity would be added annually, as this would provide investors with better signals on where to invest.
Moreover, the target supply mix should likewise be fixed for the next 40 years since investments in power projects are capital intensive and long term in nature.