Philippines DOE Push for Creation of Power Reserve Market

The Department of Energy is pushing for the development of an electricity reserve market in the Philippines, which the National Grid Corp. of the Philippines (NGCP) can tap to avoid power shortages such as the May 8 and July 3 Luzon-wide blackouts. NGCP operates the country’s power transmission highway.

Energy Secretary Carlos Jericho Petilla said a frequency imbalance in the country’s power grids – Luzon, Visayas and Mindanao – could be addressed by having a reserve market. He said there is frequency imbalance because “there aren’t enough reserves.”

“That is why we’re pushing for a reserve market. We don’t have a reserve market right now,” he said. A reserve market is where there is additional power capacity that may be contracted by the grid operator for dispatch during unplanned disconnections of power system elements such as power generators from the electricity grid. Energy officials said it is up to the NGCP to enter into contracts with power generators to boost its reserves.

Petilla, meanwhile, said it is within the realm of the Energy Regulatory Commission (ERC), the power sector regulator, to monitor the performance of the grid and whether it is complying with its franchise contract and performing within the standards.

“The monitoring of the performance of the grid is actually within the realm of ERC, even the penalties. There’s also a performance benchmark to see whether NGCP is complying with its franchise. This is also under ERC. Are they performing within the standards? That is one thing we have to look into,” Petilla said.

NGCP, a joint venture between State Grid Corp. of China and OneTaipan Holdings of Henry Sy Jr., the eldest son of mall magnate Henry Sy, recently was put on the spotlight due to the May 8 Luzon-wide power outage which lasted more than 10 hours. The system-wide blackout stemmed from a tripping in the Talisay transmission line of the NGCP, which was caused by a bushfire. However, Petilla said, the bushfire should not be an excuse.

“It’s more on the equipment that they have. It started with the bushfire but that’s not an excuse. There should be an automatic tripping mechanism. What I’m questioning is the integrity of the equipment being used to trigger automatic tripping. But that line is also going to be upgraded this year. Actually next year but they’re advancing it to upgrade the line and the equipment this year. Some of the equipment are already 25 years old. They’re actually scheduled for upgrading,” Petilla said.