Saturday, March 29, 2008 WESM can ease power shortage
The business sector and power industry stakeholders in Cebu are ready for the Wholesale Electricity Spot Market (WESM) even when it remains a guessing game as to when WESM will finally become operational.
During yesterday’s power forum organized by the Cebu Chamber of Commerce and Industry (CCCI), Rogelio Lim, general manager of the Cebu Private Power Corp. (CPPC), said power industry stakeholders in Cebu are prepared to participate in the electricity spot market.
“But we don’t know why WESM is not ready yet,” Lim said, adding that once WESM becomes operational, it will improve Cebu’s critical power supply.
He said WESM will not bring about an abrupt rise of power rates since the current distributor utilities have existing contracts with power generators with fixed power rates.
WESM, though, will enable other independent power producers (IPPs), and companies having their own power supply, to trade their surplus in the market.
DOE approval
At the same time, big power consumers and even subdivisions can participate as buyers.
Philippine Electricity Market Corp. (PEMC) media relations officer Jo Cabillo, in a phone interview with Sun.Star Cebu, said the firm—which manages the WESM—is waiting for the energy secretary’s approval of the market’s commercial operations in the Visayas.
Based on initial announcements, WESM was supposed to start commercial operations last Feb. 26, but PEMC postponed it to March 26, which was last Wednesday.
Cabillo confirmed that when PEMC issued the advisories, the Department of Energy (DOE) had not yet given its approval. But she told Sun.Star Cebu that PEMC was merely following the provisions of Republic Act 9136, also known as the Electric Power Industry Reform Act (Epira), which allows the integration of the Visayas after one year of WESM’s commercial operations in Luzon.
“Right now the ball is in their (DOE) hands,” Cabillo said.
Aside from WESM, another solution to address Cebu’s critical power supply for the next two years is to transfer one power barge in Davao and move it within the Visayas power grid, said Mosses Red of the National Power Corp.
Other sources
But Aguinaldo Briones, senior service specialist of DOE 7, said the proposal needs the approval of the energy secretary.
He said that although there are ongoing exploration projects to tap other supply sources, actual generation would take longer. He also said that the Leyte geothermal plant can no longer be expanded as its source has already been maximized.
By September of this year, there will already be a power supply deficit of five megawatts within the Visayan Electric Co.’s (Veco) franchise area, based on the demand forecast for 2008 to 2010, said Veco’s Ricardo Pardillo.
“But that is still manageable and we can still survive the whole of 2008,”he told participants of the power forum.
But Pardillo said that Veco expects a five-megawatt (MW) deficit in its supply side by September this year, a total shortage of 15 MW in 2009 and 27.8 MW in 2010.
Red warned that during summer, every one degree Celsius rise in temperature will create an increase in power demand of 20 MW.
But Cebu will have new power generation plants starting 2010.
Global Power Solutions is constructing three coal power plants at its power complex in Toledo City with a combined capacity of 246 MW. The plants are expected to become operational in the first half of 2010.
Kepco-Salcon Power Corp., on the other hand, is building two 200-MW coal power plants in the City of Naga. The plants are expected to become operational in 2011.
When the new power generation plants begin operating, Cebu will become a net exporter of power, Lim said. DME
