Malampaya shutdown to hike power rates

Malampaya natural gas plant: Eight-day shutdown. https://malampaya.com/

The eight-day shutdown of the Malampaya natural gas facility starting last Friday is expected to jack up electricity prices by less than P1 a kilowatt-hour, according to the Department of Energy (DoE).

The shutdown, which will last until July 21, has prompted the three gas-fired facilities being served by the Malampaya to use the more expensive liquid condensates to enable them to continue providing electricity to the Luzon grid.

Collectively, the three gas-fed plants—the 1,200-MW Ilijan, 1,000-MW Sta. Rita and 500-MW San Lorenzo facilities—generate 1,950 MW out of their total capacity of 2,700 MW. The Ilijan plant produces only 450 MW out of its 1,200 MW capacity due to a scheduled maintenance activity, according to Energy Undersecretary Josefina Patricia M. Asirit.

The DoE, however, was hoping that the impact of the Malampaya shutdown on electricity pricing would be further mitigated by the entry of more coal-fired power facilities and hydropower plants in the Luzon grid, Asirit said.

The energy official identified the plants helping shore up power supply reserves in Luzon as the Kalayaan hydropower facility, which is contributing 180 MW (and can be doubled to 360 MW), and a unit of the Calaca coal plant in Batangas that is expected to start generating electricity this week. Also further increasing supply is the Malaya thermal facility in Rizal, which is projected to contribute 200 MW.

Asirit was quick to note that the impending rate increase, which would be felt by consumers in their power bills next month, would ensure an adequate and stable power supply this week and throughout the shutdown period.

Asirit said the peak power demand (or the highest level of consumption by Luzon) this week was forecast to reach 7,300 MW, a comfortable level given the 8,700 MW of available supply in the Luzon grid.

“Even with the first day of the Malampaya shutdown last Friday, we still have a normal supply situation for the Luzon grid. We have roughly 8,700 MW of available supply, which means we have more than enough reserves just in case any of the plants will go offline unexpectedly,” Asirit explained.

As of Saturday, the Luzon grid registered 1,676 MW in power supply reserves.

After the eight-day shutdown, the Malampaya facility is again expected to go offline for 30 days in the second half of next year.

Among the preparations included the formation of a “grid reliability task force” that would enable the government to enforce strictly the existing implementing rules governing power-generation companies and penalize those found to be violating their existing contracts.

The move was meant to help the DoE better manage the available capacities and ensure adequate supply at any given time, especially when a major facility would be shut down.