Meralco execs see 'tight' power supply in Luzon in next few years

Luzon's power supply may not be able to cope with the projected strong economic growth if additional power plants will not be constructed in the next few years, according to the head of the country's biggest power distributor. "We do need more power plants in the country,” Meralco chairman Manuel Pangilinan told participants of the Philippine Investments Summit 2013 on Wednesday. “The margin of safety in Luzon is very, very tight. And unless we fire up our oil-fired plants.. . [we may] experience brownout in Luzon." The Philippine Independent Power Producers Association (PIPPA), the association of the country's independent power producers, has already urged the government to prepare the power sector for the anticipated increase in demand due to the strong economy. In a statement, PIPPA said reports of the Philippine economy beating forecasts and further expectations of accelerated growth should be a signal that adequate, reliable and competitively-priced power supply is needed. For his part, Meralco president Oscar Reyes noted that power supply in the next few years "will be increasingly tight because it takes four years for new power plants to be built." Reyes said that once under a "tight supply scenario," the Luzon grid may suffer brownouts if a 600 MW to 1,200 MW unexpectedly goes offline. He added this may also lead to high power rates. "If the oil-fired power plants have to fill in the tightness, that will influence the price [of electricity]," he said. Reyes said that in anticipation of this "tightness" and ensure adequate power supply, Meralco, through the Meralco PowerGen Corp., is already planning to build 2,880 megawatts of new capacity in the long-term. "We are trying to put up place our own generation portfolio. The firsty is RP Energy of 600 MW which the Luzon grid really needs to come in by 2016," he said. — KBK, GMA News