Manila Electric Co. (Meralco), the biggest retailer of electricity, is seeking approval from the Department of Energy to purchase 170 megawatts of power in preparation for an anticipated increase in demand during the dry months and the election period.
Meralco vice president and head of utility economics department Lawrence Fernandez said the company would endorse the terms of reference of the competitive selection process, or bidding, to the Third Party Bids and Awards Committee.
“As soon as the TPBAC receives the Department of Energy (DOE)-approved TOR, the TPBAC will commence the process, starting with the publication of the invitation to bid,” Fernandez said.
Meralco officials In October cited the need to secure an additional 170 MW of supply in preparation for increased demand during the dry months, the election period and declining gas supply from the Malampaya project in northwest Palawan.
Meralco earlier sought approval from DOE to secure the same level of capacity during the dry months this year. The agency did not grant the request.
The decline in gas supply from Malampaya forced the country’s natural gas plants to run on the more expensive liquid fuel or shut down some of their operations, leading to lower generation capacity in the Luzon grid.
An industry executive earlier warned Luzon would have a tight power supply in the dry months next year, or the election period, amid increasing demand, depleting reserves from Malampaya and the inability of the plants to hold regular maintenance amid the COVID-19 pandemic.
“I think it’s going to be a very difficult summer. I think only one new power station has come into the energy mix in Luzon, up north, a 660-megawatt super critical coal power plant. Aside from that, there are no new power stations coming into the market,” Frank Thiel, managing director of Quezon Power (Philippines) Ltd. Co. and general manager of San Buenaventura Power Ltd. Co., said earlier.
QPPL operates a 440- MW coal-fired power plant, while SBPL owns a 500-MW coal-fired station in Mauban, Quezon. SBPL is the Philippines’ first supercritical coal-fired power plant that was switched on in October 2019.
“This can be a very tight situation. I think we will have barely enough provided all the plants are there at the same time, and we will don’t have any surprises,” Thiel said, in response to questions about supply forecast for 2022.
He said as demand continued to rise, some power plant projects were put on hold while others were not able to conduct most of their scheduled maintenance last year because of the pandemic.
“Pre-pandemic, we had a certain demand. During the pandemic, the demand dropped and I think a lot of projects were put on a lull because of that situation,” he said.
“In Luzon, the economy started taking off again. Demand has increased and was back to pre-pandemic levels and increasing. Next year is going to be very tough,” Thiel said.