Bleak, challenging energy sector outlook seen in ’23
I NDUSTRY stakeholders paint a bleak and very challenging power sector this year.
The Institute for Climate and Sustainable Cities (ICSC) said rotating brownouts could happen in the second quarter of this year because of two reasons that were not included in earlier projections of the grid operator.
“The power outlook for 2023 is bleak. We at ICSC do not foresee much improvement in the supply from both coal and fossil gas power plants,” ICSC senior policy advisor Pete Maniego Jr. said.
He cited the weekly demand, supply, and operating margin 2023 report of the National Grid Corporation of the Philippines (NGCP) in which it cited sufficient operating reserves in the second quarter, specifically from April 24 to May 28, 2023. However, the ICSC said the assumptions of these projected margins are very optimistic and might not reflect the actual operation of the grid.
He said yellow and red alerts, with possible rotating blackouts, would be possible again in the second quarter of this year, “If these two considerations are not mitigated.”
He was referring to the forced outages of coal-fired power plants and the continued shutdown of the Ilijan gas plant.
Based on the operating margin projections, the ICSC said around 8,300 megawatts (MW) should be available for coal-fired power plants. However, the total installed coal capacity in Luzon grid is less than that.
“This means that new capacities should be available during this second quarter of 2023 to meet the 8,300 MW available capacity projected in the operational margin. Additionally, many existing coal fired power plants have experienced unplanned outages and exceeded their ERC [Energy Regulatory Commission]-mandated allowable outage limits in 2022.
“If the same unplanned outages occur in the second quarter of 2023, then this would significantly deplete the available capacity during this period,” the group warned.
Meanwhile, the shutdown of Ilijan power facility since June last year has led to a capacity deficit of 1277 MW in the Luzon grid, which has increased the frequency of red and yellow alerts. “If the full capacity of Ilijan power plants is not available by second quarter of 2023, then this would significantly reduce the available capacity,” it pointed out.
Energy Secretary Raphael Lotilla could not stress enough the importance of additional power supply and reserves during the summer months when demand is at its peak. “We need every source of power to bridge that period,” Lotilla had said.
The energy chief conveyed to the lawmakers early on the possibility of several yellow alerts and possible red alerts that await the Luzon grid this year. Based on initial assessment of the country’s power supply and demand for this year, NGCP could issue 17 yellow alerts and three red alerts throughout 2023.
A red alert status is issued by the grid operator when power supply is insufficient to meet consumer demand and the transmission grid’s regulating requirement.
DOE Undersecretary Rowena Cristina Guevara said, “we are more worried in summer” because of higher demand.
The NGCP has yet to release an updated power demand and supply for this year. It stressed though that even if maintenance work on power plants is prohibited during summer, this is not an assurance that there will be no power outage during the period. It is when there are unscheduled shutdowns and derations, and extensions of maintenance duration that grid operations may be disrupted enough to warrant the issuance of a grid alert status, it said.
Power firms vowed to continue and complete their committed power projects as soon as possible to help plug that deficit.
Based on DOE’S latest data, the total committed power projects as of November 2022 in Luzon from 2022 and beyond will result in an additional capacity of 9,168.17MW capacity and 1,500MW of Energy Storage System (ESS).
Of this, 926.82MW of power generation capacity and 760 ESS are targeted for commercial operation this year.