DOE secures pledges to avert Luzon brownouts

The likelihood of brownouts hitting Luzon appears to have been averted as the Energy department on Friday said it had secured commitments expected to allow two baseload power plants to supply the grid. San Miguel Energy Corp. was said to have promised to put the 620-megawatt (MW) Limay plant online by Monday, ahead of schedule, while the Power Sector Assets and Liabilities Management Corp. (PSALM) reportedly pledged to release funds for the 650-MW Malaya facility’s fuel. "We have to build up the inventory for Malaya so I have called up PSALM to allocate and release funds for fuel supply procurement," Energy Secretary Angelo T. Reyes said in a statement.. "Our concern this coming week will be addressed by activity 1 and 2 which is the Limay and Malaya power plants," he added Mr. Reyes said he had also secured word from the operator of the Malampaya deepwater gas-to-power project to cut its maintenance schedule. "We have touched base with SC (Service Contract) 38 to have their maintenance period shortened by five days, instead of having it up to March 11, (it will end on) March 6," he said. The Malampaya field provides gas to the 1,200-MW Ilijan, 1,000-MW Santa Rita and the 500-MW San Lorenzo plants. Manila Electric Co., the country’s largest electric utility, sources bulk of its power needs from the Sta. Rita and San Lorenzo plants. Power interruptions, however, will still occur should the Limay or Malaya plants be offline by next week, Mr. Reyes said. "If we can not have Limay and Malaya onboard by Sunday, we will have three-hour rotating brownouts in Metro Manila, so we are working frantically to have those things onboard," he said. Confirmation of their commitments were not immediately available from SMEC and PSALM officials. The National Grid Corporation of the Philippines (NGCP) said on Thursday that the Luzon grid was expected to incur a 500-MW shortfall by Tuesday. The deficit is expected to occur as the Malaya plant run by Korea Electric Power Corp. runs out of fuel. The 620-MW Limay plant, meanwhile, is currently offline and was originally expected to come onstream by the end of the month. As of Friday, the Luzon grid was still on "yellow alert" with only 258 MW in reserves, way below the required 1,200 MW. Arthur J. Young Jr., chairman of the Semiconductor and Electronics Industry of the Philippines Inc. (SEIPI) which represents companies producing the country’s main export, said member firms were preparing for brownouts. "We are obviously going to make sure that our gensets (generator sets) are up and running for this," Mr. Young said in a phone interview. Roseann C. Villegas, corporate communication manager JG Summit Holdings Inc., said the firm’s Robinson’s Malls were adequately covered. "We will be utilizing our large-capacity generation sets should there indeed be brownouts," Ms. Villegas said in a phone interview. Most likely to be affected are the small industries, said Mario Jose Sereno, Federation of Philippine Industries’ international trade policy committee head. "Big industries like petrochemical companies have big generating sets. What is usually most affected are the small manufacturing industries who rely primarily on the grid," he said. - BusinessWorld