ENERGY Secretary Carlos Jericho L. Petilla has given up on the possibility that the lease or purchase of additional generating capacity will solve the country’s power woes next year.
“The option to purchase or lease has diminished because there is no time,” Petilla said on Tuesday.
Before Congress went on recess, the Senate and the House of Representatives separately said they see no reason why they should fast-track the issuance of a joint resolution that will, among others, grant President Aquino an authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase of about 500 megawatts (MW). It will be the Power Sector Assets and Liabilities and Management Corp. (PSALM) that will conduct the negotiation for the government.
However, it will take six months upon issuance of the joint resolution for government to negotiate and sign a contract with the private sector that is willing to provide for the additional capacity to the grid. This is no longer feasible as March 2015 approaches, Petilla said.
On one hand, PSALM, later in the day, made public a list of companies that have expressed their willingness to make this option feasible.
It said it was tasked by the Department of Energy to engage in exploratory discussions with companies for the purchase or lease of generator sets as a measure to address the anticipated power crisis in the summer months of 2015.
For the past months since President Aquino asked Congress for the authority to establish additional generation capacity under the Electric Power Industry Reform Act. PSALM said it has been receiving several letters of intent and accommodating requests for meetings from these potential contractors.
“In the interest of transparency,” PSALM said, there are 21 companies that have “expressed their willingness to address the government’s need in one way or another.”
These are Aggreko Pte. Ltd., 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 Co., Guangxi Hydroelectric Construction Bureau, Horizon SynergyCo. Ltd., Itochu Corp., Jeongan Electric Co. Ltd., JS Philippines Global Corp., Novo-Gapmec Power Philippines Inc., PT Sumberdaya Sewatama-Power Solution Provider, Philman Corporate Distribution, Ring Power Corp., Siemens Inc. Philippines, SO Energy, International Inc. and Third Millennium Holdings Corp.
Remaining options
PETILLA said four options remain. These include the Interruptible Load Program (ILP), energy-saving measures, faster implementation of power projects and attempts to reduce force outages.
“This is where we will focus on,” Petilla said.
He said a meeting with the grid management committee will be set soon on how it can monitor and reduce forced outages. “We want plant owners to be more conscious about not having forced outages,” Petilla said.
The energy chief also wants temporarily do away with the tedious permitting process because it only delays the implementation of the power projects.
For instance, Petilla cited the road right-of-way problem encountered by Millennium Energy.
The power firm was supposed to produce 100 MW of additional capacity by upgrading its Navotas power plant. The rehabilitation is targeted to be finished by March 2015.
However, the planned rehabilitation has now been put on hold because the Fish Port Development Authority (FPDA), which owns the property where the power facility is located, has yet to give its green light.
Millennium Energy’s power facility in Navotas is situated in a property under the FPDA.
No brownout
“ALL of these we will try to pursue. I am still confident that all four options can result in no brownout. That I am sure of,” Petilla said.
The Energy Secretary said his biggest concern is that all these four options are nonfirm, meaning there is no formal agreement that binds the interested party to comply with any of the four measures left to address the Luzon power shortage in summer of 2015. “These are all voluntary in nature,” Petilla stressed.
Latest figures from the Department of Energy has it that up to 678 MW will be needed to cover both generation deficiency and provide minimum reserves as against an earlier projection of 900 MW. The agency estimates that for every 100 MW 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 one-month maintenance shutdown. Luzon grid is dependent on Malampaya as it fuels three power plants-Santa Rita (1,000 MW), San Lorenzo (500 MW) and Ilijan (1,200 MW).
This facility currently provides over 40 percent of the country’s energy needs.
The DOE was already able to persuade power producers to move the maintenance shutdown of their power plants that were originally scheduled in March and April to June and July.
“But I am not in control of the power plants that will conk out during summer. If that happens, then that’s a big problem. But as far as 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,” explained Petilla.