The National Grid Corporation of the Philippines (NGCP) has secured the regulatory approval to implement its Ancillary Service Procurement Agreement (ASPA) with three Aboitiz-owned power firms.
Ancillary services (AS) are referred to as “services that are necessary to support the transmission of capacity and energy from resources to loads, while maintaining reliable operation of the transmission system in accordance with good utility practice and the Grid Code.”
The Energy Regulatory Commission said in a statement that the approval was in response to the petition of NGCP to procure ancillary service from the SN Aboitiz Power-Magat Inc., SN Aboitiz Power–Benguet Inc. and Therma Luzon Inc. to augment the existing reserves for the Luzon Grid.
According to NGCP, the agreement will address the possible AS supply deficiency during the dry season, when the Kalayaan Hydroelectric Plant has a low water reserve.
NGCP spokesperson Cynthia Perez-Alabanza explained that by entering into an agreement with the AS suppliers, the grid operator is ensured of the reliability of the supply of reserves necessary to maintain the quality and frequency of electricity transmitted to distribution utilities and other grid-users.
NGCP President Henry Sy Jr. has long been pushing to lower AS rates for NGCP grid customers.
“We are constantly looking for ways to lessen AS cost by engaging power generators who are technically capable and willing to provide AS at a rate acceptable to grid-users,” Sy said.
The ASPA, which will be effective for a period three years, is a result of negotiations between NGCP and the three power firms to arrive at an AS rate that is beneficial for the generators as supplier and NGCP’s power customers as consumers.
In turn, the ERC-approved AS rate indicates that AS charges may be 30 percent to 40 percent less than the current structure for the same amount of reserves.
AS, according to ERC, are needed to regulate the frequency of transmitted electricity to avoid fluctuations, and to help the system adapt to sudden loss of power supply to prevent the occurrence of massive blackouts.
AS also provides assistance to back up generating plants to recover from a shutdown to temporarily augment lack of supply in the system, thereby normalizing the system during a power loss.
Madelaine B. Miraflor