Luzon on yellow alert as Malampaya reduces supply

MANILA, Philippines – Luzon was on yellow alert, Wednesday, June 17 due to gas flow restriction from the Malampaya facility, which accounts for 40% of the grid’s requirements.

The yellow alert – the second time this week – was up from 11 am to 12 noon and from 1 pm to 3 pm.

A yellow alert means that contingency reserves are below the minimum level set by the regulator. It does not necessarily mean power outages or blackouts, but a yellow alert could turn red and power outages would occur when reserves fall.

The ideal buffer is at least 647 megawatts (MW). When power reserves dwindle and fall below 647MW, which is the largest running power generating unit, a yellow alert is issued by the National Grid Corporation of the Philippines (NGCP).

The Malampaya facility supplies natural gas to Kepco Philippines’ 1,200-megawatt (MW) Ilijan combined cycle plant and the 1,000-MW Sta Rita and 500-MW San Lorenzo natural gas plants of First Gas, a subsidiary of the Lopezes’ First Gen Corporation.

The Manila Electric Company (Meralco) sources about 45% of its power requirement from the gas plants, which, in turn, rely on Malampaya to fuel their facilities.

Alerts in place

Meralco was alerted on Wednesday morning that Shell Philippines Exploration B.V. (SPEX) imposed a natural gas restriction on the Malampaya platform due to an “undisclosed technical problem,” limiting the Sta Rita and San Lorenzo combined natural gas allocation to about 403MW.

SPEX is the upstream company of Shell in the Philippines in charge of operating the Malampaya deep water gas-to-power project. It did not reply when sought for comment.

Meralco Utility Economics Head Larry Fernandez said the yellow alert was due to a restriction in gas supply to First Gas and Ilijan plants. In particular, Ilijan Block B was shut down at 11 am due to reduced gas supply. Sta. Rita modules 10 and 30 and San Lorenzo modules 50 and 60 will subsequently change over from natural gas to liquid fuel starting at 9:01 am.

Fernandez said that a yellow alert in Luzon was issued Monday, June 15. “Like today, there was a reduction of Malampaya supply. The yellow alert was from 1 pm to 3 pm.”

A similar incident occurred in May, resulting in a spike in Wholesale Electricity Spot Market prices.

A check with the NGCP power situation outlook showed that as of 1 pm Wednesday, power reserve in Luzon was expected at 355MW. System capacity was expected at 9048MW with a peak demand of 8693MW.

Fernandez said Meralco was alerted by NGCP and the Department of Energy (DOE) also called the utility firm’s attention to put on standby its Interruptible Load Program (ILP) in case there is a need to activate it.

Under the ILP scheme, big power users will be asked to run their own generators when supply is short in the summer months, instead of sourcing from the Luzon grid. In exchange, they will be compensated for their fuel costs. – Rappler.com