NGCP denies delaying Visayas ancillary services contracts, cites plant outages

By Rjay Zuriaga Castor

ILOILO CITY — The National Grid Corporation of the Philippines (NGCP) rejected allegations by the Department of Energy (DOE) that it is delaying the execution of ancillary services, which the agency argued contributed to recurring power shortages and rotational brownouts in the Visayas.

NGCP, in a statement shared with Daily Guardian, said it continues to pursue additional ancillary services procurement agreements (ASPAs) as directed by the DOE, but contracts can be completed only once suppliers are operational, available, and technically compliant.

“There is no intention to delay the execution of these contracts. Execution timelines are driven by availability and technical compliance by suppliers,” it said.

“These agreements, however, require qualified and available facilities whose technical capability to provide the required service can be validated through the prescribed connection, commissioning, and testing processes. ASPAs cannot be completed for facilities that are not yet operational or whose technical capability has not yet been established,” it added.

NGCP also stressed that the recent power alerts in the Visayas stemmed from the simultaneous forced outages of several baseload power plants, which tightened supply.

“The recent alerts occurred when available generation fell below the level required to meet demand and ancillary services requirements following simultaneous outages of generating units,” it said.

NGCP said ancillary services perform specific technical functions that maintain grid stability and respond to contingencies.

“They provide balance and technical support to the transmission system and should not be treated as replacement power for insufficient generating capacity,” it explained.

NGCP said it also continues to implement transmission projects and other measures to improve transfer capability across the Visayas.

NGCP issued the statement in response to the DOE’s criticism of its handling of ancillary services procurement.

NGCP operates the country’s power transmission network and procures ancillary services from suppliers through ASPAs.

A yellow alert means power reserves have fallen below the required contingency level, while a red alert means available supply is insufficient to meet demand and reserve requirements, a condition that can lead to rotational brownouts.

On Monday, the DOE said NGCP’s failure to complete the ASPAs on time contributed to the Visayas’ exposure to power shortages and market price volatility, despite directives issued as early as May to secure at least 250 megawatts of reserves.

Energy Secretary Sharon Garin said the agency had repeatedly directed NGCP to secure the necessary reserves as the region faced an emergency power situation.

The DOE said it issued directives on May 27, June 16, June 18, and Aug. 3, primarily in response to the critical power situation in the Visayas.

The DOE said NGCP’s failure to fully execute and file the required agreements prompted it to issue a show-cause order on Aug. 13.

“What was missing was timely execution. Delays in contracting left consumers with less protection when generating units unexpectedly went offline,” Garin said.

The DOE is counting on additional ancillary services to help prevent power alerts while the region awaits new baseload power plants, which are expected to address the supply deficit beginning in 2028.

“What we are trying to do is cover the next three to five years, meaning there will be a buffer. That will help us just in case any of these plants is on outage; we will have protection in the grid,” Garin said during a joint congressional hearing on the Visayas power crisis on Oct. 3.

To address prolonged yellow and red alerts while new baseload plants are still being developed, Garin said the DOE is relying on the deployment of 253 megawatts of ancillary services through battery energy storage systems (BESS).

DOE data showed that the projects, listed by capacity in megawatts (MW) and storage in megawatt-hours (MWh), include the 13-MW/30-MWh EAUC BESS in Cebu, the 20-MW/20-MWh SBPI Tabango BESS in Leyte, and the 50-MW/200-MWh CREC Silay 2A and Silay 2B BESS projects in Negros.

Also included are the 50-MW/200-MWh CREC Bohol BESS, a 50-MW/106.128-MWh BESS project in Panay, and another 50-MW/106.128-MWh Iridance 5 BESS project in Cebu.

The BESS projects were at various stages of development as of Oct. 2, with some already finalizing their ASPAs.

“We have asked NGCP to directly contract these companies. Now they are still with NGCP. There is a delay at NGCP, there is no contract yet, but we asked NGCP to do this way back in May,” Garin added.