Prepare for expensive power in ‘challenging’ 2023, says Consunji

Next year will be the “most challenging” in terms of power supply as the energy sector has fallen short in preparing for the projected surge in electricity demand, according to DMCI Holdings Inc. chair and president Isidro Consunji.

While he does not see frequent brownouts, “power rates might be expensive,” he told reporters last week. “The highest price is [recorded] not in April and May. It’s in June and July,” he added, citing historical data.

Consunji explained hydroelectric power plants have run out of water to generate electricity. Such facilities could also go on preventive shutdown for a certain period, he added.

Based on a circular issued by the Department of Energy (DOE) in 2020, operators of hydropower plants are allowed to conduct annual maintenance activities during the April to May period.

Supplies may only stabilize in 2024 as liquefied natural gas (LNG) could be ready by then, according to the DMCI chief. DMCI Holdings is a diversified engineering conglomerate that has businesses in the energy sector through Semirara Mining and Power Corp., a listed integrated energy company and DMCI Power Corp., which supplies energy to small and remote islands in the country not connected to the power grid.

Consunji’s warning is consistent with the DOE’s projection of a “difficult” power supply situation next year. The government foresees power interruptions due to the unavailability of several power plants, which could culminate in the declaration of several yellow and red alerts.

Yellow alerts happen when reserves fall below a safe margin. Generators then declare a red alert when supplies further dwindle resulting in rotational brownouts similar to what happened in 2020.

Historically, red alerts are issued between May and June, or the period when electricity demand is at its highest as customers battle the blazing heat of summer.

Just last week, when cooler temperatures could have helped available capacities, red and yellow alerts were announced as six power facilities went on an unscheduled shutdown. Some of the plants were operating on a decreased capacity due to old age.

The DOE is banking on LNG projects in the pipeline to help stabilize power supply, especially in Luzon which has been experiencing supply deficit in previous years.

It earlier reported the integrated LNG terminal of Atlantic, Gulf & Pacific International Holdings and Linseed Field Power Corp. would be commissioned in March 2023 and start commercial operation the following month.

For its part, First Gen Corp. is targeting to commission its LNG facility also in March next year with a commercial run three months later.

Energy Secretary Raphael Lotilla had cited the need for the country to diversify its power sources, including importing natural gas.

“Given its scheduled availability at the end of the first quarter of 2023, liquefied natural gas is considered an important source for fuel diversification,” he said. INQ