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06 July 2011

After GN Power entry, DoE still seeking 900MW for Luzon

MANILA — After the much-anticipated entry of the 600-megawatt capacity of GN Power by 2013, the Department of Energy (DoE) is still soliciting additional 900 megawatts of capacity to plug forecast capacity shortfall in the Luzon grid until 2015.

In the supply-demand outlook which has been the anchor for its Grid Operating and Maintenance Program (GOMP) for 2011, the DoE indicated that capacity additions for Luzon must reach 1,500 megawatts until 2015. It shall be spread as follows: 300MW by 2011; 300MW by 2012; 450MW by 2014; and another 450MW by 2015.

But with the project of Redondo Peninsula Energy in Subic being firmed up, and of which capacity may likely be ramped up to 600-MW, the government’s dilemma for Luzon supply may already be solved partly. As of latest developments, the project would already be spearheaded by the newly-formed power generation unit of Manila Electric Company and still in partnership with the Aboitiz group and Taiwan Cogeneration International Corporation.

Even with these capacity additions though, it is seen that the anticipated increase in demand may still render shortfalls, especially in the reserve requirement. Industry studies portend that power demand may expand to 4.5 percent within this five-year period from the historically-logged growths of 3.7 to 3.9 percent.

The prescription then is for DoE to ensure the entry of other firmly-committed projects which may come from greenfield ventures or from the uprating of the privatized power plants.

Based on data it submitted to the Energy Regulatory Commission (ERC), the energy department indicated that the existing dependable capacity by year 2013 would be at 9,384 megawatts as against peak demand forecast of 8,309 megawatts. This entails that the required reserve margin of 23.4-percent vis-à-vis peak demand at that time, which would be around 1,944MW, cannot be met fully.

A decent reserve margin is a “must” in an electricity system for it to function efficiently and be able to meet end-user demand. It is significant in such a way that in case of forced outages, there would be ready capacity that can be relied upon as substitute for capacities being displaced or suddenly taken out from the system.

Of the required capacity shoring up, it qualified that the only ones committed have been 41MW for 2011; and the GNPower facility of 600MW by 2013; while the rest according to the energy department are still “indicative.”

Nevertheless, the DoE qualified that it is similarly counting on the capacity uprating of some plants, such as the Bacon-Manito geothermal facility as well as the other privatized plants in Luzon in beefing up power supply for the grid.

Given the circumstances, the energy department viewed that the most necessary step it has to consider during such crucial transition would be to continuously operate the 650-megawatt Malaya thermal plant, thus, postponing its retirement which would have been scheduled as early as 2011. (Myrna M. Velasco, Manila Bulletin)