SENATOR Sherwin T. Gatchalian, who heads his chamber’s energy committee, said Wednesday that regulators must strictly enforce the ancillary services (AS) requirements, a scheme for ensuring adequate reserve power, to improve supply on the grid.
He said that the Department of Energy (DoE) ordered the National Grid Corp. of the Philippines (NGCP) two years ago to enter into AS contracts to prevent rotating power outages, known in the industry as “brownouts.”
“The NGCP (is) not contracting the right amount of reserves. Clearly, they are violating that policy… (The) ERC (Energy Regulatory Commission) should now implement the policy. The foundation has been laid down by the Supreme Court that DoE produces the policy and ERC enforces the policy. In this case, since NGCP is not contracting, ERC should punish them,” he said during a virtual news forum Wednesday.
According to the DoE, the grid operator contracted regulating, contingency, and dispatchable reserves of 237 megawatts (MW), 180 MW, and 145 MW, respectively, for the Luzon grid as of the fourth quarter.
The Luzon grid’s required minimums for regulating, contingency and dispatchable reserves are 491 MW, 647 MW, and 647 MW. These reserves are also known as AS.
Aside from the lack of compliance on reserves, the Philippines has yet to address the “big problem” of red tape, according to Mr. Gatchalian.
“Red tape is a barrier to entry for new power plants… It takes two years to get the permits of these power plants approved. Imagine two years with your permit, another four years to build the plant, that’s six years from start to end to get new power,” he said.
Mr. Gatchalian said the reserve shortfall and bureaucratic paperwork are just two of the issues which the country needs to solve to improve its power supply.
The NGCP placed the Luzon grid under red alert for three consecutive days last week following forced plant outages and higher temperatures.
On Thursday, the Senate Committee on Energy is set to hold a hearing to discuss long-term solutions to the power shortage during the dry months, and ensuring the quality and reliability of electric supply.
Asked to comment, NGCP Spokesperson Cynthia P. Alabanza said the NGCP’s AS requirement was contracted “for the most part.”
“The ancillary services are there, but they’re being dispatched by the IEMOP (Independent Electricity Market Operator of the Philippines) as supply, because in times of deficiency like now, supply for consumption should be prioritized over reserve,” Ms. Alabanza told BusinessWorld.
At the end of 2020, the NGCP had a deficit of 72 MW in its contingency reserve or about 11% of the requirement for the Luzon grid.
“But the others (are) over contracted,” she said, referring to regulating and dispatchable reserves from firm and non-firm contracts. — Angelica Y. Yang