NGCP sets competitive bidding for reserves procurement

Published June 16, 2021, 4:34 PM

by Myrna M. Velasco

Transmission firm National Grid Corporation of the Philippines (NGCP) will start soliciting tenders on its targeted competitive bidding for the procurement of ancillary services (AS) or power reserves for the country’s power grids.

In a statement to the media, NGCP said it will implement public bidding for ancillary services, as well as explore new energy sources to guarantee energy security in the power system.

“NGCP will start a competitive bidding process for its ancillary services requirement to help meet the objectives of the government and secure the best value for our power customers,” the transmission firm noted.

Anthony L. Almeda, president of NGCP, said with the competitive auction that the system operator will carry out on AS procurements, the company can corner the best pricing on securing the reserves needed by the power system.

“With an open and public bidding process, we ensure full transparency and comply with internal governance imperative of accountability, which all our stakeholders deserve,” he stressed.

The transmission company still argued though that even if it will procure its AS requirements – either on firm or non-firm basis, it does not see this as a solution to the recurring brownouts in the country.

Almeda maintained that “what we have is a supply and not a distribution problem,” and he stressed that “for the grid to effectively address imbalances between supply and demand, we need to increase the power capacity of the country to meet rising demand as we start to recover and fully reopen the economy.”

The NGCP president insisted that the firm contracting being pushed by the Department of Energy (DOE) “will not result in additional supply,” rather, it “will only lead to a change in payment terms where all power – used or unused – will have to be shouldered by the public.”

Almeda considered the nature of firm AS contract to be resembling a “take-or-pay” arrangement because that will be shouldered by consumers in their electric bills whether the contracted reserves had been dispatched or not.

It was Energy Secretary Alfonso G. Cusi who prodded NGCP to resort to 100-percent contracting of power reserves because in his belief, that could spare power grids from service interruptions when supply wobbles.