The Energy Regulatory Commission (ERC) on Monday announced it will be issuing show cause orders (SCOs) to 40 power generating companies that did not comply with the reporting requirements on planned and unplanned outages.
In a statement, the ERC said six companies in Luzon, 28 in the Visayas, and six in Mindanao failed to comply with the reporting requirements set out in an ERC resolution from 2015.
Out of the 2,083 incidents or unplanned outages from January to April 2021, only 1,288 incidents were reported.
On the other hand, 220 of the 236 planned outages were reported.
“We have been monitoring the activities of the generation companies, especially those that underwent unplanned outages, that caused the thinning of power supply in the Luzon Grid,” ERC chairperson and chief executive officer Agnes Devanadera said in a statement.
“This was aggravated by the increased demand for electricity due to warmer temperatures. As a consequence, there have been sustained high prices in the WESM (Wholesale Electricity Spot Market),” she added.
Meanwhile, the Philippine Independent Power Producers Association, Inc. urged the government to encourage construction of more peaking power plants.
Also on Monday, the Institute for Climate and Sustainable Cities warned of a worsening power crisis during the dry months next year as the economy fully opens up with more people getting vaccinated.
Pedro Maniego Jr., ICSC senior policy advisor and former chairman of the National Renewable Energy Board said solar power, which is the fastest to build, will help address power demand.
“It (power crisis) might even be worse because we expect the economy to get better next year. We are vaccinating our people so there will be higher demand and many of these coal plants are aging and therefore breaking down and often take time to be repaired if they can be repaired and building new coal plants will take time,” Maniego said.
He said solar power, of which around 9,000 MW have service contracts with the Department of Energy in Luzon, are fastest to deploy.
“They will only need six months to a year in order to be built. Wind takes probably 1one to one-and-a-half years,” he said.
ERC has been looking into the unplanned outages and the recent price spikes in the WESM, the trading floor of electricity amid the ongoing rotational brownouts implemented by the National Grid Corporation of the Philippines (NGCP) in the Luzon grid.
ERC has sent notices of non-compliance to companies to explain the incurred cumulative unplanned outages beyond the maximum allowable for the year 2021.
A 2020 ERC resolution sets a cap on annual unplanned outages per generating plant technology.
Meanwhile, ERC has created a task force that will conduct a study on the power plant outages and resulting high prices in the WESM.
The task force has already identified the generation plants that will be prioritized for technical inspection to verify the outages, including, but not limited to, the actions undertaken by the power plants to get back online.
The ongoing study also focuses on analyzing the hourly market data and correlating different factors in the WESM.
“The power supply shortage during the summer months has been a perennial problem, and the regulator has been monitoring the situation from day one,” Devanadera said. “There are existing rules and mechanisms in place on how to mitigate the impact to consumers. Thus, the stakeholders must be responsible in managing their operations efficiently and sensitive enough to the implications of planned or unplanned outages. The commission has been undertaking all the necessary efforts to help mitigate, if not totally address this recurring challenge.”
From May 4 to May 31, 2021, the price of power at the WESM was P7,841 per megawatt hour (MWh).
ERC said the average price could have reached P11,263 per Wh or 44 percent higher without the secondary price ceiling.