The National Grid Corporation of the Philippines (NGCP) said it needs 1,776.7 megawatts (MW) worth of firm contracts to cover the grid’s reserve requirements, though it considers itself adequately covered if non-firm contracts are counted.
NGCP, based on a BusinessWorld report, said it currently has 809.3MW worth of firm contracts, and 2,807.2MW in non-firm contracted capacity. Firm contracts are more costly as generators charge more for their power to be committed on a standby basis. Full coverage would cause prices to rise.
NGCP Assistant Vice President and spokesperson Atty. Cynthia Alabanza said that the grid firm has separate firm and non-firm contracts as the need for reserve power is not constant. Firm and non-firm contracts form part of ancillary services (AS) or reserve power.
In its press briefing on Tuesday, the Department of Energy (DOE) reiterated its call on NGCP to secure its AS from firm contracts to get a clearer outlook on the available power reserve level. It can be recalled that the agency constantly pounded the grid firm to secure AS, particularly firm contracts, following last year’s Red Alerts in Luzon.
“We have to dissociate the requirement for ancillary services from the energy market so the distributing utilities know that there’s a supply that’s not available,” DOE Electric Power Industry Management Bureau Director Mario Marasigan said on Tuesday.
Though NGCP said that the power supply is lacking and not the power for balancing supply, it is already in the process of converting its contracts into firm contracts.