SC ORALS FALLOUT | DOE formalizes 'must-run' order for Malaya plant, tweaks WESM rules

Malaya Thermal Power Plant (photo courtesy of means BUSINESS

MANILA - A day after an agency in-charge of Malaya Thermal Power Plant (MTPP) drew flak for not running it in November, the Department of Energy has formally designated the facility as a 'must-run' unit (MRU) for the electricity spot market.

The DOE issued Department Circular 2014-01-0003 designating the 650-MW Malaya Thermal Power Plant (MTPP) as an MRU in the Wholesale Electricity Spot Market (WESM).

The MTPP, an oil-fired government-owned power plant located in Pililia, Rizal, is capable of providing reactive power support or voltage support to the grid.

Under the WESM rules, an MRU is a generating unit identified and instructed by the System Operator - the National Grid Corporation of the Philippines (NGCP), to provide the needed power supply on a real-time basis or on a particular schedule deemed necessary to ensure the reliability and security of power supply in the grid, especially during times of supply shortfall.

With the circular, the MTPP will also be exempted from the Must-Offer Rule (MOR) of the WESM.

The MOR requires all generation companies registered in the WESM to declare and offer their respective maximum generating capacities in the spot market to prevent capacity withholding by the power plants.

The circular mandates the Power Sector Assets and Liabilities Management Corp (PSALM) to ensure efficient operation, readiness as an MRU and availability of fuel of the MTPP as well as to take the lead in the diligent coordination with the PEMC, the spot market operator.

The circular also subjects PEMC to ensure that the MTPP will be compensated under the MRU settlement in accordance with the specified schedule of the System Operator.

Energy Secretary Carlos Jericho Petilla said "with the designation of the 650-MW [MTPP], we are grounded on the efficient utilization of remaining government power assets to provide reliable supply of electricity."

The DOE secretary said that with the issuance of the circular, the role of MTPP is now clarified.

The DOE also issued DC2014-02-0004 relaxing the provisions under the "Chapter 3.1.1" of the WESM Manual on registration, suspension, and deregistration criteria and procedures on generating units.

This circular seeks to enhance the operational efficiencies of oil-fired power plants as these facilities need not run continuously for 24 hours particularly since most of these have no bilateral contracts.

Under the new circular, generating units with fast start capability, duly certified by the System Operator or NGCP will no longer be required to run based on their registered minimum stable loadings (Pmin), but will continue to submit offers in the WESM.

With this, the capacity gap in the WESM will be reduced and allow power generators to avoid penalties when it is running on below minimum power supply provided that these plants can supply power as soon as it is demanded.

The circular directed the NGCP, in consultation with the Grid Management Committee, to determine and submit to the DOE a certified list of all the generation facilities with fast start capability, which shall serve as basis of PEMC in allowing generating facilities to change their Pmin registration to lower level or at zero (0) MW.

"In the interest of ensuring adequacy and reliability of the power supply, the DOE shall continue to assess the performance of the generation units and if warranted, will use the necessary policies and effect changes to the WESM Rules, motu propio, as necessary,” the circular said.