‘Top power firms mull over schemes to avert outages’

Power industry stakeholders are discussing a so-called “gas-swapping” arrangement that will result in gas allocation for the 1,200megawatt (Mw) Ilijan power plant that has been on shutdown since June last year.

In a recent meeting with the department of energy (doe), representatives of First gen Corp., Manila electric Co. (Meralco), South Premiere Power Corp. (SPPC), and Prime energy came up with possible solutions to avert brownouts in the hot dry season.

Among others, the parties involved discussed the allocation of 80 standard cubic foot (SCUF) of First gen’s Malampaya banked gas to operate Ilijan plant. this plan, if implemented, would allow lijan to generate a minimum of 400MW to a maximum of 1,000MW to support the expected increase in demand for electricity from March to July and prevent brownouts.

the 1,200MW Ilijan plant has been on shutdown since June last year after the build-operate-transfer (BOT) arrangement between the government and SPPC, a subsidiary of SMC global Power Holdings Corp., had lapsed. Ilijan could not source gas from the depleting Malampaya gas field. However, it could run on diesel but this would mean higher prices for consumers because of skyrocketing fuel prices in the world market.

the doe has yet to formally announce this arrangement, but based on the minutes of its december 27, 2022 meeting, the parties also discussed to keep costs of power to a maximum of P4 pesos per kilowatt hour (kwh); to draw up the gas swapping agreement for submission to Prime energy, now the operator of the Malampaya gas field; for doe to ensure that Meralco sources energy at the least possible cost; and for the doe to commit to helping those involved in the gas-swap arrangement secure permits and hurdle bureaucratic processes at the shortest time possible.

“We are here to assure the public that we are prepared and we are not going to let our people down as far as power supply stability is concerned,” a source from the doe said. “thanks to the foresight of our secretary, this plan would be in place to ease worries about power supply when demand rises in March to July.”

doe estimates placed the potential shortage of electricity in the socalled peak months possibly at up to 1,000MW. “We are taking this proactive stand so there would be no need for our businesses, our consumers and especially those relying on continued supply of power to worry,” the doe official added.

“given doe’s main objective to lower electricity prices, it commits to help with all government processes required to implement the gas swapping agreement including endorsement to ERC [energy Regulatory Commission],” a doe document read.

the same document stated that First gas proposed to run two units of Sta. Rita on liquid fuel oil (LFO), effectively making available to Meralco around 80Mm scf/day of Malampaya gas under the Santa Rita gas sale purchase agreement, which Meralco can then allocate for Ilijan’s use, to make available 500MW of Ilijan’s unit 1.

First gas needs a lead time of two months to secure additional LFO deliveries for the gas-swapping arrangement, which could take place in March until June.

the parties stressed that doe endorsement is needed to proceed with any discussion on gas swapping.