THE Department of Energy (DoE) has issued a circular that will require half of the supply contracted as reserve power to be on a “firm” basis in which the grid operator has a binding agreement to source its requirement from a power generation plant.

“Signed na ang AS (ancillary services) policy. Ipa-publish na lang namin (The ancillary services policy has been signed. We will shortly publish it),” DoE Assistant Secretary Redentor E. Delola said.

“We’ll probably publish it in the next couple of weeks,” he told reporters.

Ancillary services, which generally refer to power reserves, are necessary to support the transmission of power capacity and energy from generation sources to consumption loads. These reserves maintain the reliable operation of the transmission system in line with good utility practice and the Philippine Grid Code.

The DoE posted in the first quarter the draft rules setting forth the process of procuring ancillary services, which is the task of system operator National Grid Corp. of the Philippines (NGCP).

“We also put contracting caps for the reserves. Inaayos lang natin ‘yung definition, kung ilang megawatts per type of reserve, ilang percent of that should be (on a) firm contract of NGCP,” Mr. Delola said. “Sa draft na nilagay natin, 50% of each reserve requirement should be with firm contract.”

(We also placed contracting caps for the reserves. We’re just finalizing the definition on how much megawatts per type of reserve and how many percent should be on a firm contract of NGCP. Under the draft, 50% of each reserve requirement should be with firm contract.)

With the new rules, all reserve energy categories — primary, secondary and tertiary reserves — are to be procured through contracts provided that a competitive selection process is undertaken for this purpose.

Reactive power support and black start ancillary services are to be procured only through contracts. Black start is the process of restoring a power system to recover from shutdown.

Mr. Delola said at present, many of NGCP’s power reserve contracts are on a non-firm basis, which may not be available when the system operator needs it.

“When you need it, because it’s non-firm, puwede n’ya sabihin na wala ako (the supplier can say that it’s not available),” he said.

Mr. Delola said the circular will also launch the reserves market where power generation companies can trade their output.

Once the reserve market starts operating, the procurement of ancillary services is to be done through contracts or through the market. All reserve categories are subject to the central scheduling and dispatch of the market operator.

“The new market management system is capable of handling the reserve market,” Mr. Delola said, referring to the information technology infrastructure that allows for the trading of electricity in the wholesale electricity spot market. — Victor V. Saulon