DOE chief mulls ‘limited’ gov’t participation in power generation

DOE chief mulls ‘limited’ gov’t participation in power generation

MANILA – Department of Energy (DOE) Secretary Alfonso Cusi has proposed to the Senate to allow the national government to participate in the power sector, particularly in securing reserve capacity for the country.

In a Senate hearing Thursday, Cusi urged lawmakers to look into allowing the government to engage in limited power generation to augment energy supply requirements when needed.

“For instance, government power plants are best for the reserve capacity of the grid as they would be outside the competition in the electricity market for power supply,” he said.

Cusi said this initiative aims to complement the power supply of energy companies, and not compete with the private sector.

“(W)e are one of those very few (countries) that (the entire power sector) is in the hands of the private sector,” he said.

He added the Philippines is also the only country in Southeast Asia that has given the system operation to the private sector.

Moreover, the DOE chief said allowing government to participate in power sector would be the “antidote for the continuing non-compliance” of the National Grid Corporation of the Philippines (NGCP) to secure the required firm ancillary service contracts that will serve as backup whenever there is a thinning of power supply due to forced and unplanned outages of power plants.

According to DOE data, the NGCP only contracted 48 percent or 237 megawatts of the required 491 MW regulating reserve as of the last quarter of 2020.

The NGCP is also short in securing firm contracts for the required 647 MW contingency reserve, as it only contracted 28 percent of the requirement or equivalent to 180 MW.

For dispatchable reserves, the NGCP only secured 145 MW or 22 percent of the required 647 MW.

“The ancillary services policy was issued by Secretary Cusi to require the system operator, the National Grid Corporation of the Philippines, to contract ancillary services among others on firm basis so that we will have a more reliable grid,” Electric Power Industry Management Bureau director Mario Marasigan said in the Senate hearing.

Last week, red alert status was declared in the Luzon grid amid rising power demand due to increasing temperature while power supply was declining caused by unplanned outages of four power plants.

The ancillary service capacities should have been the grid’s backup to prevent rotational brownouts in the system whenever there is unforeseen decline in power supply.

Meanwhile, Cusi also asked the Senate to look into amending the franchise of the NGCP including taking back the responsibility to prepare the Transmission Development Plan that until now has not been approved.

The DOE chief likewise wanted to revert to the government the system control of the grid management of ancillary services. (PNA)

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