22 JULY 2012
Cooler Temperatures Tame WESM Prices
Cooler temperatures apparently tamed prices in the Wholesale Electricity Spot Market (WESM) and similarly spared consumers from probable rotating brownouts in last week’s eight-day shutdown of the Malampaya gas production facility.
Beyond nature’s favorable influence, Energy Secretary Rene D. Almendras preferred to credit the “cooperation of all stakeholders” in the “not-so-punishing outcome” of the gas facility’s scheduled downtime.
“Everyone did their part and delivered to ensure that there is enough power to meet the demand with the least impact to consumers,” he said, referring to gas facility operator Shell Philippines Exploration B.V. (SPEX); system operator National Grid Corporation of the Philippines (NGCP), the power generators and also the Manila Electric Company.
A glimpse at the daily market report of the WESM still showed a cleared price of P51.237 per kilowatt hour at the trading hour of 12 noon last July 17; but the overall load weighted average prices (LWAP) were not as high as the previous weeks when supply had been direly tight. The second highest cleared price last week was at P23.396 per kWh.
By examining the WESM averages prices deeper during the Malampaya shutdown week, it can be culled that while there have been swings in the LWAP from P4.55 per kWh to as high as P14.81 per kWh, these were still lower than the billed prices last month.
Nevertheless, the shift of the gas plants to more expensive condensate and diesel fuels will still result in higher prices that consumers will pay next month, especially in the case of Meralco which is the off-taker of the generated electricity of the 1,500-MW Sta. Rita and San Lorenzo gas plants.
The anticipated spike in prices had been exacerbated by the utilization of the Malaya thermal plant as a must-run unit (MRU) during the period. It was mainly intended to plug capacity gap since only one unit of the 1,200-megawatt Ilijan was ran for some days.
Almendras explained that the July 13-20 shutdown of the Malampaya facility is a “mandatory requirement to ensure equipment integrity and complete outstanding maintenance works.”
The energy secretary carefully worded his statement in the DOE press release that there was “careful planning and excellent execution”; perhaps to conceal what affected industry stakeholders earlier tipped off as “planning lack” –something they have done in good faith to compel the department into firming up a contingency plan for the process.
The Malampaya gas field is feeding fuel to the country’s three gas-fired plants with 2,700 megawatts of aggregate capacity. Without them shifting to other fuel to continuously operate, the whole Luzon grid would be plunged into rotating brownouts.
Read article source in Manila Bulletin