NGCP to seek bids for reserve power services

Angelica Y. Yang, Reporter

PRIVATELY-led National Grid Corp. of the Philippines (NGCP) said on Wednesday that it would hold a competitive public bidding for the supply of power reserves or ancillary services (AS) to fulfill government requirements and secure the “best value” for consumers.

“We want to guarantee the best pricing for AS, especially since this is a pass-on cost to consumers. With an open and public bidding process, we ensure full transparency and comply with internal governance imperative of accountability, which all our stakeholders deserve,” NGCP President and Chief Executive Officer Anthony L. Almeda said in an e-mailed statement.

AS are support services that help maintain the electric grid’s quality, reliability and security.

However, the NGCP official said that procuring reserves on either firm or non-firm arrangements will not solve the recurring brownouts or power interruptions.

“What we have is a supply and not a distribution problem. For the grid to effectively address imbalances between supply and demand, we need to increase the power capacity of the country to meet rising demand as we start to recover and fully reopen the economy,” he said.

Mr. Almeda reiterated NGCP’s stand that full firm contracting of reserves, which the Department of Energy (DoE) has mandated, will “only lead to a change in payment terms where all the power, used or unused, will be shouldered by the public.”

‘URGENT’ NEED FOR RESERVES
Separately on Wednesday, the Philippine Independent Power Producers Association, Inc. (PIPPA) said fulfilling the country’s need for ancillary services and allowing the entry of new plants would lessen the effects of forced outages on the power grid.

“There is an urgent need to fill in the ancillary services requirement of the grid and complement it with additional capacity with the entry of new plants. This combination will ensure that the impact of forced outages will be minimal or at a best-case scenario, no blackouts,” PIPPA said in an e-mailed statement.

The DoE previously flagged NGCP for not procuring enough firm-contracted reserves for the grid as of end-2020.

Last week, NGCP explained that if it implements the 100% firm-contracted requirement for AS, consumers will see spikes in their power bills — with typical households in Luzon, Visayas and Mindanao seeing increases of P128, P108, and P278 in their monthly electricity bills, respectively.

According to a DoE circular issued in 2019, NGCP is required to fully procure firm-contracted reserves to guarantee the grid’s reliability.

“(We) value compliance and strive for transparency and adherence to the industry’s rules and regulations,” PIPPA said, adding that it “fully supports the policies that will result to stability, security, and reliability in the energy system.”

The group added that it is awaiting the completion of transmission and connection projects, including the Mindanao-Visayas Interconnection Project (MVIP), which will link the Mindanao and Visayas grids. Once this happens, the country will be connected under one grid.

“In particular, for Mindanao, we would like to see the interconnection happen as there is currently an oversupply of energy which can be tapped and used properly,” PIPPA said, referring to the MVIP’s goal of allowing excess power to be exported where it is needed, subsequently helping prevent shortages.

“ linking the three grids and with firm contracting as per the mandate of the DoE, we can be confident that we have investors entertaining the build of new plants,” it added.

In February, NGCP reported that the interconnection project might not be completed by the end of this year after discovering portions of its fiber optic cable to be damaged.

The system operator earlier placed the Luzon grid under red alert, triggering rotating brownouts in portions of the major island for three consecutive days amid higher temperatures and forced plant shutdowns. A red alert notice is declared if the supply-demand balance deteriorates, bringing the possibility of power interruptions.