Temporary halt to WESM mulled

The Philippine Electricity Market Corp. (PEMC), the operator of the country’s wholesale electricity spot market (WESM), is looking at the possibility of temporarily stopping the operation of WESM next month to prevent rotating brownouts in the Luzon grid.

PEMC vice president for market operations Mario R. Pangilinan told a press conference that there would be a fuel supply interruption from Nov. 18 to Dec. 12 due to the scheduled maintenance of the Malampaya gas pipeline in Palawan.

As an offshoot of the natural gas supply interruption, the operations of the gas-fired power facilities Ilijan (1,200 megawatt) and Sta.Rita/San Lorenzo (1,500 MW) would cease during the period.

During the expected outage of these gas-powered power plants, PEMC sees projected demand to reach an average 4,536 MW, or a maximum of 5,810 MW and a minimum of 3,104 MW.

PEMC president Lasse Holopainen said they are now coordinating with the Department of Energy (DOE) to determine if there would really be a need to suspend the WESM operation to prevent any supply problem during these periods.

"There also ongoing discussions in the DOE on whether or not to suspend the market to prevent possible high prices. However, this are still being considered along with other contingency measures being discussed with DOE, National Power Corp. (Napocor) and the other major generators," he said.

"We’re still discussing whether it’s needed, if economic trading can continue, then we will continue it, but this is again a preemptive measure," he added.

He said they are also closely coordinating with the parties involved to determine if it would be necessary to shut down the WESM operations.

"We have been discussing with the natural gas operators the possibility of having substitute fuel. For instance, First Gas and Kepco are trying to source possible substitute fuel to keep them running at certain periods of time, particularly during peak demand," he said.

Holopainen noted that the interruption will result to thin reserve margin due to the combined outage of all natural gas plants amounting to 2,700 MW.

He also expressed apprehension that there are also other factors that may affect supply and could lead to a price uptick and worse power outages.

"This will imply a possible escalation of spot prices due to tight supply condition and dispatch of oil-based plants. It will also result in the poor quality of system frequency due to low reserve and possible rotating brownouts in case there are additional forced outages of the generating plants, which means with only 6,700 megawatt left, and a plant will trip, we might then have to go a rotating brownout," he said.