Surge in power demand spurs NGCP plea to stakeholders
By Lenie Lectura – March 12, 2025
from Business Mirror
THE National Grid Corporation of the Philippines (NGCP) strongly appealed to power industry stakeholders to strictly monitor and ensure the availability of power in the coming months, following a surge in demand due to exceptionally high heat indices in recent days and unplanned outages of critical power plants.
The grid operator recorded last March 6 the highest peak demand for the year at 12,467 megawatts (MW), a 5-percent increase from the Department of Energy’s (DOE) forecast demand of 11,870 MW for that day. For 2025, the DOE forecasted a peak of 14,769 MW for Luzon to occur mid-May, a 5.37-percent increase from the 2024 actual peak of 14,016 MW on April 24, 2024.
Last March 5, hot weather conditions caused a spike in demand, prompting the NGCP to issue a yellow alert.
A yellow alert is issued when the operating margin is insufficient to meet generation’s contingency requirement, putting the grid at risk with the available contingency reserve less than the required operating margin. A red alert status is issued when power supply is insufficient to meet consumer demand and the grid’s contingency requirement.
As in the past years, NGCP cautioned the public that while power supply seems sufficient on paper, over the years, unplanned outages of critical plants are a major factor in the power situation and have been the primary cause of power interruptions.
While NGCP has complied with the DOE directive on the procurement of ancillary services (AS) through competitive selection process (CSP) and payment of AS procured through the AS Reserve Market (AS RM), the unplanned outages cause all power dispatched through the transmission system to be used for energy consumption, NGCP said.
It explained that the contingency and dispatchable ancillary services will have been depleted and already running and dispatched for use by the consumers, and no longer reserved for ancillary services, since the contingency for which they were procured has already occurred.
“A shortfall in supply, should that occur, means that while all available generators are running, including those contracted by NGCP for ancillary services, the existing supply is still insufficient to meet demand,” NGCP stated.
The procurement and scheduling of ancillary services through the AS RM is the responsibility of the Independent Electricity Market Operator of the Philippines (Iemop).
NGCP reiterated the need for additional, non-intermittent baseload power sources to ensure the stability of power supply. As the transmission service provider and grid operator, NGCP can only provide an overview of the current supply and demand situation and dispatch any and all available power. The Electric Power Industry Reform Act (Republic Act 9511) prohibits NGCP from owning or operating power generating facilities.
Meanwhile, the NGCP reported that transmission wheeling rates, or what NGCP charges for its primary service of delivering power, has gone down by 3.14 percent, from P0.5422/kWh in the January 2025 billing period to P0.5252/kWh in the February 2025 billing period.
AS rates for the February 2025 Billing Period increased by 5.05 percent, with P0.6975/kWh compared to P0.6640/kWh in January 2025 Billing Period. This cost includes the second tranche of the settlement of the remaining 70 percent AS cost from the Reserve Market for the March 2024 Billing Period whose recovery was deferred by the ERC.
AS charges pertains to the cost for AS sourced from the Reserve Market and those for AS providers with bilateral contracts with NGCP.
“For the March 2025 billing of the end-consumers, NGCP charges only 52 centavos per kWh for the delivery of its services. The bulk of transmission charges is for AS, which is remitted directly to AS providers,” it said.
NGCP does not earn from AS and did not benefit from the increase in prices. The AS cost is a pass-through cost, and generating companies benefited from this increase. AS are support services used to balance and stabilize the grid during power supply-demand imbalance.
