Power reserve; NGCP failed to secure ‘firm’ ancillary service contracts: group

Posted by watchmen
January 23, 2024
Posted in HEADLINE

By Dominique Gabriel G. Bañaga


Local power advocacy group Power Watch Negros (PWN) has pointed a finger at the National Grid Corporation of the Philippines (NGCP) following a massive blackout on Panay Island earlier this month.

PWN secretary-general Wennie Sancho believes that NGCP’s failure to contract sufficient power reserves played a pivotal role in the energy reliability crisis.

Sancho said that over the past two years, the Department of Energy (DOE) has been reminding NGCP of its obligation to provide sufficient levels of ancillary services (AS) or power reserves, as outlined in DOE Circular No. 2019-12-0018.

The circular mandates NGCP, as the system operator, to procure “firm” AS contracts, equivalent to four percent of the power demand.

These reserves are crucial for grid reliability, ensuring that they are readily available in case of power plant outages.

However, Sancho pointed out that NGCP has been consistently criticized by the DOE for not complying with the “firm” contracting requirement.

“NGCP’s failure to secure 100 percent ‘firm’ contracts for [AS] raises concerns about contract compliance rather than a power crisis,” Sancho said.

Sancho is also urging the government to ensure NGCP’s full compliance with DOE policies, especially those affecting the security and reliability of electric power supply.

He added that the recent power disturbance in Western Visayas could have been avoided if NGCP had completed the 230kV Cebu-Negros-Panay (CNP) Backbone Project on time, a crucial element of the Transmission Development Plan.

Meanwhile, former Energy Secretary Alfonso Cusi said NGCP opted for insufficient capacity and unreliable “non-firm” AS procurement agreements.

Cusi emphasized that preventing power outages requires a regulatory reserve, which is equivalent to four percent of peak demand plus the capacity of the largest power plant in the system.

He added that this is not the first time the privately-owned grid operator has faced scrutiny.

In May 2017, the National Transmission Corporation accused NGCP of violating its concession agreement by allegedly profiting excessively from the operations of the country’s electricity grid.

In July of last year, the Energy Regulatory Commission issued a show cause order against NGCP for delays in 37 transmission projects.

Earlier, the DOE said they are constantly monitoring the power supply in Panay after the January 2 blackout.

DOE Assistant Secretary Mario Marasigan said no rotational brownouts have been experienced on the island.

Marasigan is hoping that NGCP’s line enhancement program, particularly the CNP Stage 3 Project, will be completed soon as this will prevent outages.

The NGCP eyes to finish the project by March of this year./With reports from PNA / DGB, WDJ


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