Tight powersupply seen this summer...

Manila, Philippines — The Energy Regulatory Commission (ERC) has warned of possible red alert warnings this summer as the Luzon grid is projected to have a shortfall of at least 1,800 megawatts (MW) based on data from the Department of Energy (DOE).

ERC is now working on internal measures to address the supply shortage, its top official said.

There is a shortfall of 1,800 to 1,900 MW of supply under the energy outlook of the DOE translating to red alert notices in the Luzon power grid, ERC chairperson and chief executive officer Agnes Devanadera told reporters in an interview Wednesday.

A red alert status means there is severe power deficiency in the power grid.

Devanadera said the DOE’s energy outlook took into account only the planned shutdown of power plants.

“There will be unplanned shutdown, considering the age of plants. From our data, we also have zero to five year old plants going into unplanned outage,” Devanadera said.

To help minimize the impact on the Luzon grid, the ERC is working on measures to help augment supply during the critical months.

Part of its mitigating measures is to fasttrack its permitting and inspection processes, Devanadera said.

“What we are looking at is what we can do as power regulator. Internally, we are looking at what we need to fast-track in terms of inspection. We already got more engineers,” she said.

An example is the issuance of certificates of compliance (COCs), which is required before any generation company can commence commercial operations.

However, fast-tracking the permitting and inspection can only address a small aspect of the issue.

ERC has ordered distribution utilities and power generators to continue their power supply agreements (PSAs) even with the Supreme Court (SC) order to conduct competitive selection process (CSP) to avoid power outage.

The ERC counted 153 PSAs, or around 1,000 MW of supply, affected by the SC order, Devanadera said.

Last month, the Independent Electricity Market Operator of the Philippines Inc. (IEMOP) projected spot market prices to remain high this year due to anticipated tightness of supply amid expected increase in demand and slow development of new power plants.

For this year, IEMOP expects  peak demand to grow by 5.6 percent to 14,191 MW around May or June.

This means an additional 700 MW capacity is needed to be injected into the grid—around 500 MW in Luzon and nearly 200 MW in Visayas, IEMOP COO Robinson Descanzo said.

However, the market operator said there are no new capacities coming in before the critical months, leading to tight supply conditions and price spikes in the wholesale electricity spot market.