Petilla gives up hope on additional power generation bid

MANILA, Philippines – Time has run out on the option to purchase or lease additional power generating capacity, Energy Secretary Carlos Jericho Petilla said Tuesday, November 11.

The additional power generating capacity is expected to help solve the country’s anticipated summer power crisis in 2015.

“The option to purchase or lease has diminished because there is no time,” Petilla said.

Before recess, the Senate and the House of Representatives separately said they find no reason why they should fast track the joint resolution that will, among others, grant President Benigno Aquino III authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase of about 500 megawatts (MW).

The Power Sector Assets and Liabilities and Management Corporation (PSALM)  will conduct the negotiation for the government.

However, it will take 6 months upon issuance of the joint resolution for government to negotiate and sign a contract with private sector players willing to provide additional capacity to the grid.

And such is no longer feasible as March 2015 is approaching, Petilla stressed.

A joint resolution in Congress giving President Benigno Aquino III special powers to avert the looming energy crisis next year will not include contracting additional capacity, a lawmaker had said.

“We will be issuing the joint resolution to give the President authority to deal with the power crisis minus the option of purchasing or leasing additional capacity,” Reynaldo Umali, chair of the House Energy Committee said earlier.

The committee needs another week to pass the resolution after Congress resumes deliberating proposed bills on November 17.

21 companies ‘willing and able’

PSALM released the list of 21 companies willing to provide additional power generating company on November 11.

PSALM said the companied have “expressed their willingness to  address  the government’s need, in one way or another.”

The companies are: Aggreko Pte Ltd; Altaphil Inc; APac Energy Rental Pte Ltd; APR Energy; ATN Philippines Solar Energy Group, Inc; Cinta Asia (Singapore) Pte Ltd; Energreen Technology, Inc; Enertech Systems Industries, Inc; General Electric Company; Guangxi Hydroelectric Construction Bureau; Horizon Synergy Co Ltd; Itochu Corporation; Jeongan Electric Company, Ltd; JS Philippines Global Corporation; Novo-Gapmec Power Philippines, Inc; PT Sumberdaya Sewatama – Power Solution Provider; Philman Corporate Distribution; Ring Power Corporation; Siemens, Inc Philippines; SoEnergy International Inc; and Third Millennium Holdings Corporation.

PSALM said it was tasked by the DOE to engage in exploratory discussions with companies for the purchase or lease of generator sets for the anticipated summer 2015 power crisis.

PSALM added that it has been receiving several letters of intent and accommodating requests for meetings from these potential contractors, since Aquino asked Congress for the authority to establish additional generation capacity under the Electric Industry Power Reform Act (EPIRA).

Viable options

With time running out on the first option, Petilla said there 4 other options to help avert the power crisis: the Interruptible Load Program (ILP); energy saving measures; faster implementation of power projects; and attempts to reduce forced outages.

“All of these, we will try to pursue.  I’m still confident that all 4 options can result in no brownout. That I’m sure,” Petilla said.

But the biggest concern is that all these 4 options are not yet firm, meaning there is no formal agreement that binds the interested party to comply with any of the measures left to address the Luzon power shortage in summer of 2015.

“These are all voluntary in nature,” he stressed.

Petilla said there will be meeting with the grid management committee on how it can monitor and reduce forced outages. “We want plant owners to be more conscious about not having forced outages,” he said.

The energy chief would also want to temporarily do away with some tedious processes that delay the implementation of power projects.

Petilla cited the road right-of-way (ROW) problem encountered by Millennium Energy. The power firm was supposed to produce 100MW of additional capacity by upgrading its Navotas power plant, with the rehabilitation expected to complete by March 2015. But the planned rehabilitation has now been put on hold because the Fish Port Development Authority (FPDA), owner of the property where the power facility is located, has yet to okay the project.

To date, 678MW will be needed to cover both generation deficiency and provide minimum reserves as against the earlier Department of Energy (DOE) projection of a 900-MW power shortage. The DOE estimates that for every 100MW of power shortage, a one-hour daily power outage is imminent.

The power crisis is anticipated to occur starting March 15 when the Malampaya gas facility undergoes a month-long maintenance shutdown. The Luzon grid is dependent on Malampaya as it fuels 3 power plants – Sta Rita (1,000 MW), San Lorenzo (500 MW), and Ilijan (1,200 MW). This facility currently provides over 40% of Luzon’s energy needs.

But the DOE already persuaded the power producers to move the maintenance shutdown of their power plants from March and April to June and July.

However, the DOE has no way of knowing which power plants will conk out during summer.

“If that happens, then that’s a big problem. But as far as the scheduled maintenance is concerned, they already agreed to move it in June and July where demand is low and hopefully, by that time, the expected additional capacity in summer would have already come in,” Petilla said. – Rappler.com