Gov’t keeps Malaya power plant

MANILA, Philippines - The government has decided to keep the 650-megawatt (MW) Malaya Thermal Power Plant in Rizal while there are no private buyers yet and operate it as a must-run unit to augment supply in the summer months.

Energy Secretary Carlos Jericho Petilla said they have approved the request of the Power Sector Assets and Liabilities Management Corp. (PSALM), the government agency tasked to privatize state-owned power assets, to hold on to the power plant.

“PSALM’s request has been approved. While there are no takers, Malaya is best used as a must-run unit,” Petilla said. 

Must-run units are power generation facilities that are tapped to provide power when supply is not enough. These facilities can be compensated for their operations. 

The Department of Energy has already issued a circular designating the Malaya plant as a must-run unit in the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

Last week, Petilla said the National Grid Corp. of the Philippines (NGCP), the privately-run power grid operator, has requested PSALM to run the Malaya facility by the end of March.

The minimum capacity that the plant can offer is 150 MW, Petilla said.

He stressed that the plant would only run when needed or when there are plants that would not run, in which case additional power supply is needed.

“Every summer it’s always tight. I mean it’s not only this summer. The summer of 2013, 2012, they were all tight. In fact in 2010 it was even tighter,” Petilla said.

He said the grid would have an estimated 240 MW of reserves in the summer months, which makes the situation tight given that reserves should at least be 600 MW in Luzon.

Lawmakers have blamed PSALM for not running the Malaya plant when the Malampaya gas facility in offshore Palawan went on a one-month maintenance shutdown late last year, leading to the record high increase in electricity prices.

However, PSALM said Malaya did not run because it was not needed prior to Dec. 2. The Malampaya gas facility went on a maintenance shutdown from Nov. 11 to Dec. 10.