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NGCP procuring ancillary services from AboitizPower.

The National Grid Corp. of the Philippines (NGCP) is procuring ancillary services (AS) from AboitizPower Corp. to ensure the stability and reliability of the Luzon power grid.

NGCP has forged ancillary services procurement agreement (ASPA) with AboitizPower unit Therma Luzon Inc. (TLI), which operates the 700-megawatt (MW) coal-fired power generating facility in Pagbilao, Quezon.

Under the agreement, TLI will supply regulating reserve services to NGCP for 2018 under a firm and non-firm arrangement.

The Aboitiz plant will provide 60 MW of supply from its two generating units for the firm contracted capacity contingency reserve and another 60 MW for non-firm contract capacity.

The agreement will have a rate of P1.50 per kilowatt-hour (kwh) for the firm contracted capacity and a maximum rate of P2.25 per kwh for the non-firm contracted capacity.

NGCP said the rates are 'a reasonable recovery of its opportunity cost in making available generation capacity to provide the procured AS.'

AS is necessary to support the transmission of capacity and energy from resources while maintaining reliable operation of the transmission system in accordance with good utility practice and the grid code.

It is a system requirement to ensure grid system reliability, security and affordability of the supply.

'With this end in view, there is a need to comply with the system requirements for AS to ensure grid system reliability...NGCP has the mandate to procure the required AS through a procurement contract. However, the Honorable Commission must first approve the contract before the same could be implemented,' NGCP said.

The grid operator said the Luzon grid has not yet met the required levels of contingency reserve under the Ancillary Services Procurement Plan (ASPP).

'As the demand for power in the Luzon increases, the requirements of the system to ensure stability, reliability and security likewise increase. Ensuring the integrity of the system is essential to protect the interests of the public. The absence of system reliability and stability will certainly discourage investments and growth,' it said.

Energy Secretary Alfonso Cusi has underscored the building of an appropriate portfolio of dependable power capacity mix of 70 percent baseload, 20 percent mid-merit and 10 percent peaking plant categories, while taking into consideration the 25 percent reserve requirements on a per grid basis.

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Publication:Philippines Star (Manila, Philippines)
Geographic Code:9PHIL
Date:Jun 25, 2018
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