ERC to revisit power reserve requirements to respond to demand spikes

The Energy Regulatory Commission (ERC) on Tuesday floated the possibility of tweaking power reserve requirements to better respond to demand spikes following the series of rotating brownouts experienced in Luzon and the Visayas grids in recent weeks.

In his video-recorded message for the 3rd Economic Journalists Association of the Philippines (EJAP) Energy Forum, ERC Chairman Francis Saturnino Juan recalled that between May 13 and May 18, yellow and red alerts were raised in Luzon and the Visayas, during which manual load dropping or rotating brownouts were “implemented six times.”

With this, Juan said, “We will revisit the existing reserve requirements.”

“Should we already move from static reserve margins to dynamic, weather-indexed targets? If a heat advisory tells us the afternoon peak will be 5% higher than normal, we should have enough reserves to handle that,” he said.

The ERC chairman explained that the recent grid challenges were concentrated in the hours when supply margins were thin, especially when demand peaked at 2 p.m. “but at that hour our solar plants — including the behind-the-meter rooftop installations — are also at their highest output, lifting the supply margin and helping us absorb the mid-day load.”

“The trouble begins between 3 p.m. and 4 p.m., when solar generation begins to taper. From there, even as households switch on lights, fans, and appliances for the evening, the supply that had been carrying us through the afternoon falls away,” Juan said.

Simply put, the ERC chairman said the country was not simply facing an afternoon and early evening shortage but facing a flexibility shortage in the hours after the sun goes down.

He said that the power industry regulatory will accelerate any regulatory action needed in the procurement of ancillary services and fast-ramping capacity.

“The fact that all six manual load dropping events were caused by generation deficiency — not by transmission failure, not by fuel shortage — tells us we did not have enough reserves on the right side of the dispatch curve,” he added.

The ERC chief said the agency work with the Department of Energy (DOE), National Grid Corp. of the Philippines (NGCP), and the generators to shorten the procurement cycle and to open ancillary services to more battery storage, aggregated demand response, and hybrid renewable projects.

Moreover, he said the ERC will push and work with the DOE and other stakeholders on activating demand-side flexibility.

“A late-afternoon-to-evening crisis is the textbook case for time-of-use tariffs, interruptible load programs, and incentive-based demand response. We will work on a regulatory and market framework that allows commercial and industrial consumers to be paid for the megawatts they choose not to consume during the critical hours between the taper of solar generation and the peak of evening household demand. This is the cheapest megawatt on the grid, and we have under-used it for too long,” he added. —AOL, GMA News