Meralco: lack of baseload, not supply deal delays, to blame for pricey electricity

Meralco has attributed the rise in spot electricity prices to the long-standing lack of new baseload generation capacity in the Luzon grid, not to delays in implementing its power supply agreement (PSA) with Excellent Energy Resources Inc.

Insider spotlight:

• Meralco says high spot market prices stem from baseload capacity gap.
• Notes grid lacks new large-scale power plants since 2002.
• Cites reliance on solar and aging plants as contributing factors.
• Warns against blaming PSA delays for systemic shortfalls.
• Urges government to address capacity adequacy under the Electric Power Industry Reform Act.

“The obvious and main cause for high Wholesale Electricity Spot market (WESM) prices is the lack of supply or lack of new capacity in the grid,” the firm said, rejecting DOE accusations that PSA delays were to blame.

It pointed out that most new projects entering the grid are solar plants, which do not generate power at night, further straining supply and driving up prices.

“Many power plants today are 20 years old and plagued with unscheduled or forced outages,” Meralco added.

The company noted that the only other major new baseload plant in the pipeline—the Aboitiz Group’s GN Power Dinginin facility—was also a winner in its 1,800-MW CSP last year. It said the failure to bring more baseload plants online since 2002 has hurt grid reliability.

Meralco reiterated the need for government support to attract greenfield power projects and warned against assigning blame to utilities for issues outside their control.

— Edited by Daxim L. Lucas