Philippines' energy agency gears up for Malampaya shutdown

Affected natural gas plants will run on alternative or replacement fuel.

Energy Secretary Alfonso G. Cusi pushes to firm up measures by each concerned agencies and power stakeholders during the course of the Malampaya maintenance repair from 28 January to 16 February 2017 to ensure readiness of all stakeholders and by way of ensuring consumers are protected from any market abuses.

The Department of Energy (DOE) will closely coordinate with all Malampaya stakeholders including the Malampaya Consortium, the National Grid Corp. of the Philippines (NGCP), Manila Electric Company (MERALCO), Power Sector Assets and Liabilities Management (PSALM) Corp., Philippine Electricity Market Corp. (PEMC) and power generation companies and other distribution utilities to ensure sufficiency of power supply during the shutdown period.

Initially, Sec. Cusi instructed that “Materials, equipment and other assets necessary for the maintenance of Malampaya should all be delivered by January 15 and these should be ready for deployment to make sure that the repair activities should remain on schedule.”

The DOE noted that during the maintenance activities, some power plants are on scheduled maintenance as well. Based on initial study, the lowest projected power supply capacity during the period stood at 8,747 MW on 18 February, while highest demand is projected to reach 8,610 MW on 9 February.

To ensure sufficient power supply, the DOE requires the affected natgas power plants to run on alternative or replacement fuel but it is more expensive than natural gas. Natural Gas as fuel only costs around P4/kilowatt-hour and replacement fuel, such as diesel which costs around P6-P8/kWh.

Sec. Cusi then emphasized that “the Department is exploring all possible options and remedies to maximize protection for consumers.”

Moreover, to augment power supply, the DOE readies the Interruptible Load Program (ILP) in which around 900MW are enrolled.

Further, the DOE also encourages consumers to practice effective “demand-side management.”

The Secretary of Energy also enjoined that “The public should also be proactive in computing the effect of price adjustments to be provided in the simulations given by the agencies concerned to for consumers to practice efficiency measures to avoid price shocks.”