The National Grid Corp. of the Philippines (NGCP) invited power plants to participate in a competitive bid for Ancillary Services (AS), or reserve power that the grid can tap when the volume of baseload power runs low.

“The NGCP needs qualified Ancillary Services providers which can supply the grid requirements for Regulating Reserve, Contingency Reserve, Dispatchable Reserve, Reactive Power Support and Black Start Service, to commence in 2022 subject to the approval of the Energy Regulatory Commission (ERC) of Ancillary Services Procurement Agreements (ASPA),” the system and grid operator said in its bid invitation notice published on Jan. 25.

Five-year firm contracts are on offer subject to annual performance evaluation for power plants directly connected to the Luzon, Visayas, and Mindanao grids.

The grid operator has two contracts for its power suppliers: non-firm, which is on standby basis and contingent on availability, and firm, in which a supplier must commit to keep a certain volume of power capacity on call for the NGCP.

The Department of Energy (DoE) has been directing the NGCP to convert all its contracts to firm, in order to offer regulators a clearer picture of the available power reserves. The NGCP maintains that 100% firm contracting will ultimately raise power prices because generators command higher prices for fully committing their capacity for standby reserves.

According to the bid invitation, contract rates are as follows: P2.25 per kilowatt hour (kWh) per scheduled hour for Regulating Reserve; P1.50 per kWh per scheduled hour for Contingency Reserve; P0.85 per kWh per scheduled hour for Dispatchable Reserve; P4.00 per kiloVolt-Ampere-Reactive (kVAR) per occurrence for Reactive Power Support; and an incidental payment for Black Start Service paid per occurrence.

The NGCP set Feb. 2 as the deadline for companies to submit Expressions of Interest. A pre-bid conference is scheduled for Feb. 10.

Submission of bids for Luzon, the Visayas, and Mindanao was scheduled for Feb. 16, Feb. 18, and Feb. 19, respectively. – Marielle C. Lucenio