Unstable supply delays cheaper power for Visayas region

Business Mirror
Monday, 12 January 2009 23:56

UNTIL power supply in the region is stable, the Department of Energy (DOE) will likely put off the Wholesale Electricity Spot Market (Wesm) in the Visayas.

Based on a study commissioned by the department, the Visayas is not yet ready for Wesm, despite the system’s reported readiness since 2007, DOE Visayas director Vicente Labios said.

“Wesm is not yet viable as of this time because of the tight power situation in the Visayas,” Labios told the BusinessMirror.

Wesm, along with the time-of-use rates mechanism of the Visayan Electric Co. (Veco), had been identified by various sectors as a possible measure to avert widespread brownouts as power supply falls short of demand in central Philippines this year.

Labios said the study of Australian consultant Intelligent Energy Systems shows that market participants are not yet ready for Wesm’s full implementation, and that the system is not ready. Also, that there is still a large gap in the demand-supply scenario.

“Until these conditions are met, Wesm is not viable,” Labios added. “If we implement Wesm during a tight supply situation, power rates will definitely go very high.”

National Transmission Corp. (Transco) and National Power Corp. projected last month rotation brownouts in the Cebu-Negros-Panay (CNP) grid, as power demand goes up without a matching increase in supply.

“By 2009 we will still have the same aging plants whose output become lower and lower with power demand going higher and higher,” Crispin Lamayan, Transco assistant vice president for systems operations, said.

“By 2009 the situation will be severe; we cannot afford any of our plants to trip. Until 2010 [with no new power plants], we will have plenty of brownouts.”

Next-generation power plants in the Cebu-Negros-Panay grid would tap to the grid by the first half of 2010, such as Cebu Energy Development Corp.’s 245-megawatt (mw) coal-fired. Kepco Salcon Power Corp.’s 200-MW facility would start to operate only in 2011.

The CNP consumes around 900 MW of electricity at peak hours, with Visayan Electric Co. accounting for nearly 350 MW.

Lamayan said talks are on for large industries to crank up their own generators during peak hours.

“NPC has also rented out modular generator units for Panay Island, the tail-end of the gird, which has been experiencing brownouts since early 2008,” he added.

He hopes that summer wouldn’t be so hot, as air-cooling units would raise power demand and compel more rotation brownouts.