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Philippines' grid operator opens bids for reserve power providers

  • Jan 28, 2022
Philippine Star News

Angelica Y. Yang - Philstar.

comJanuary 28, 2022 | 3:04pm MANILA, Philippines -- The National Grid Corp. of the Philippines (NGCP) is looking for interested ancillary service (AS) providers thatwill supply reserve power to the Luzon, Visayas and Mindanao grids, months ahead of the dry season.

Ancillary services are needed to maintain the quality, reliability and security of the country's grid system. This comes months after the Energy department ordered NGCP to procure an adequate amount of AS to ensure sufficient supply to tide over periods of shortages.

The Department of Energy (DoE) earlier flagged the grid operator for not entering into enough firm-contracted reserves in the fourth quarter of 2020, which ran counter to a previous circular from the Energy department. This year, there is more urgency to secure enough energy supply for the dry season -- when demand is typically high because of air conditioning -- to make sure that the May 9 elections will not be disrupted by power interruptions.

"NGCP, through its third-party bids and awards committee, is inviting all interested grid-connected merchant plants and independent power producers, to apply for eligibility and participate in the competitive bidding for the procurement of AS," the grid operator said. NGCP said interested AS providers must be willing to provide power on a firm-based arrangement for five years, subject to a yearly performance evaluation.

The transmission service provider added that it is open to bids from multiple AS Providers across Luzon, Visayas and Mindanao. Prospective bidders need to comply with the eligibility requirements which must be submitted via email.

NGCP said that if it receives less than two intentions to bid, it will declare a "failure of bidding." The deadline for submitting the intent to bid is on Feb.

2, and the announcement of qualified bidders is on Feb. 4.

A copy of the invitation to bid may be accessed on the NGCP's website. Spot market prices up this month On Friday, the Independent Electricity Market Operator of the Philippines (IEMOP) announced that average market prices in the wholesale electricity spotmarket rose by around 8% to P6.98 per kilowatt hour (/kWh) in January versus last month's level of P6.43/kWh amid thin supply margins driven by power plant outages this month.

To bridge any supply gaps, power distributors usually tap the spot market where they can purchase additional electricityat much higher costs compared to pre-agreed supply deals. The added costs are then passed on to consumers.

"The primary reason for this is the scheduling of power plant maintenance outages, based on NGCP's schedule. Some plants which went on forced outages, while others went on deratings (decreased generation capacity)," John Paul Grayda, IEMOP Market Simulation and Analysis Manager of Trading Operations, said in an online briefing.

He noted a "drastic" drop in supply levels this month due to power outages and the impacts ofTyphoon "Odette" (international name Rai) on affected communities. IEMOP reportedan average supplyof 12,142 megawatts (MW) in January, lower than the December billing which saw a supply of 12,702 MW.

Meanwhile, average demand this month also went down to 8,544 MW compared to last month's billing period which saw a demand of 9,232 MW.

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