DOE eyes 70% cap on power plants’ contracting capacity by Q3

MANILA — Power producers in the Philippines will be required to have a 70-percent cap on their contracting capacities, likely by the third quarter of 2019, to ensure availability of buffer supply during times of need.

Department of Energy (DOE) Undersecretary Felix William Fuentebella, in a briefing Wednesday, said they are now in talks with all stakeholders for this policy.

“Soon…(We can release the Circular) in three months,” he said.

The contracting capacity of a certain power plant is described as the portion of its expected total electricity output that can be sold in advance. By limiting the amount of power that can be pre-sold to only 70 percent, the DOE is assured that there will be 30 percent electricity remaining to tap for emergencies.

Fuentebella explained that this measure is aimed at ensuring that reserve electricity is available to fill a sudden power gap, such as when a power plant shuts down temporarily.

“There’ll be no generator that will be a replacement every time. We will distribute the replacement,” he said pointing out that the reserves can be sold through replacement power contracts or the spot market when reserves are low.

The DOE executive said this policy will cover new contracts, as well as those for renewal.

Currently, the Luzon grid is experiencing yellow and sometimes red alerts due to low power reserves.

Fuentebella said the Energy Department is working to prevent this kind of situation in the future “that’s why we’re coming up with better policies.”

“Our experiences should push us to come up with better policies and we’re pushing the 70 percent cap so that our power plants won’t be strained so much and we would be able to address breakdowns,” he added.