DoE assures sufficient supply, minimal price shock during Malampaya shutdown
THE GOVERNMENT on Tuesday assured that power supply for Luzon will be adequate during the scheduled maintenance shutdown of the Malampaya facility although electricity prices could rise “inevitably” as gas-fed power plants shift to oil for their fuel.
Energy Secretary Alfonso G. Cusi said the Department of Energy ( DoE) has instructed industry participants to ensure supply during the Malampaya maintenance from Jan. 28 to Feb. 16 and the possible implementation of price mitigation measures to avoid price shocks.
“I have directed [ Undersecretary Felix William B.] Fuentebella to closely coordinate and spearhead the power sector’s activities in light of the Malampaya shutdown. We’ve already conducted a series of coordination meetings, simulations and exhausting all possible measures that we can implement to ensure supply and avoid price shocks,” Mr. Cusi said.
The Malampaya gas project, offshore Palawan, accounts for up to 20% of the country’s electricity requirements.
The gas- to- power project is being managed by a consortium composed of Shell Philippines Exploration B.V. (SPEX), Chevron Malampaya LLC, and stateowned PNOC Exploration Corp.
The DoE said it is closely monitoring the readiness and execution of various measures to ensure power supply including the availability of fuel for the affected natural gas power plants ( NGPPs): the 1,000- megawatt ( MW) Sta. Rita NGPP, the 500 MW San Lorenzo NGPP and the 97 MW Avion NGPP which will be using alternative fuel during the maintenance period. The Department will also run a backup facility, the government-owned 470 MW Malaya Thermal Power Plant in Pililla, Rizal.
The department is also looking at the readiness of Interruptible Load Program participants with a total of 900 MW enrolled power capacity which would augment supply during critical periods. It is also monitoring and securing generation capabilities of renewable energy facilities, particularly geothermal, hydropower and biomass power plants to soften the impact on consumers.
Based on the projections, highest demand is projected to hit 8,610 MW on Feb. 9, while the lowest Reserve level is projected at 706 MW on Feb. 16, triggering a possible Yellow Alert — when reserve power falls below the required level, the DoE said in its statement released on Tuesday.
“Since ensuring supply in this particular situation inevitably increases power rates, the DoE is also looking at measures to mitigate steep increase and unwarranted market behavior to ensure utmost consumer protection,” it added.
Among others, it is looking at “staggering payment of additional generation cost from having to use more expensive fuel (diesel and condensate),” noting that natural gas fuel only costs around P4/ kilowatt- hour and replacement fuel, such as diesel, costs around P6-P8/kWh.
The DoE is also reviewing how to lower the secondary price cap in the Wholesale Electricity Spot Market with the Energy Regulatory Commission ( ERC) as it encouraged the public to also conserve energy.
“The DoE assures the public that it will exhaust all possible legal options and measures to ensure supply and protect consumers from price shocks, but we cannot do it alone. That’s why we are also asking the public to remain vigilant and cooperative in managing their consumption,” Mr. Cusi was quoted as saying.
The DoE earlier said the third week of February is a critical period for power supply in Luzon, based on simulations. During that time natural gas from Malampaya will still be unavailable while several power plants will also go on maintenance shutdown. —