THE Department of Energy (DOE) has started preparatory activities jointly with industry stakeholders to safeguard energy consumers from a possible supply shortage and increase in the price of electricity due to a scheduled shutdown of the Malampaya natural gas facility early next year.
The Malampaya facility is scheduled to undergo maintenance activities from January 28 to February 16, 2017.
“My directive was clear—the Malampaya maintenance activities should pose no substantial impact to supply of electricity by using all available resources and remedies, because power is a basic necessity for our countrymen,” Energy Secretary Alfonso G. Cusi said on Thursday.
Distribution utility Manila Electric Co. (Meralco) projects an increase of around P1 per kilowatt hour (kWh) on the generation cost rate during the period of the shutdown, which its customers will see in their March 2017 billing.
Meralco’s price simulation factored in possible WESM (Wholesale Electricity Spot Market) prices due to plant outages during the shutdown and the generation cost of natural gas plants due to the change in liquid fuel (diesel and condensate), which is more expensive than Malampaya’s natural gas.
“There will be an increase, but what we will do is to minimize the increase to soften the burden to our consuming public,” energy chief said.
Cusi said plans and alternative modes should be in place and ready before the actual shutdown.
In a meeting with industry participants last December 15, the DOE was updated by Shell Philippines Exploration Corporation (SPEx), operator of the facility, about the preparatory works for the Malampaya services maintenance shutdown (Malampaya SMS).
According to SPEX, the maintenance activities will cover the repair of the sub-sea facilities, upgrades on the platform, and maintenance on the onshore plant.
“We have to ensure that the program works for Malampaya [are]within the prescribed schedule given to the DOE. Historically, SPEX completed its maintenance period on time. It is expected that it will do the same this time,” Cusi said.
To ensure power reserves during the summer period, the 600-megawatt (MW) Ilijan Natural Gas Power Plant in Batangas will time its maintenance shutdown with that of Malampaya to cost-efficiently use the Malampaya downtime period.
On the power situation outlook, the National Grid Corporation of the Philippines (NGCP) was tasked to simulate possible power supply scenarios, while the Philippine Electricity Market Corp. (PEMC) will conduct a simulation on the WESM prices during the Malampaya shutdown.
“The simulations will be submitted to the DOE for review and evaluation, so that we will be able to accurately respond to any unwarranted power market behavior,” Cusi said.
The meeting convened by the DOE last 15 December was attended by the concerned DOE bureaus, SPEX, NGCP, PEMC and Meralco.
The Energy department called for another round of consultations and coordination last 22 December. In addition to the participants in the first round of consultations, concerned generation companies, large Interruptible Load Program participants, and representatives from the secretariat of the Senate and House Committee on Energy were also invited.
“We assure the public that we will continue coordinate all the activities of those affected by the Malampaya SMS to avert any situation leading to the worst case scenario and to maximize the protection for the energy consuming public,” Cusi concluded.