With deficient capacity that can be utilized as regulating reserve, the Power Sector Assets and Liabilities Management Corporation (PSALM) is being urged to cease for now from privatizing the remaining hydro plants.

It was gathered from the System Operator that the lack of regulating reserve in the system has been affecting power quality and that it triggers extreme frequency excursions that may lead to equipment breakdowns, including in power plants.

Hydro power plants are considered most-fitted for dispatch as regulating reserve because of their highly-efficient blackstart capability, meaning they can be started and ramped up swiftly to normalize regulating margin in the power system.

“PSALM must consider halting privatization of the remaining hydro plants because these are important assets as regulating reserve to maintain power quality in the system. If we transfer all hydros to the private sector, we will not have regulating reserve left,” a government source said.

He added that if “frequency excursions will be experienced more often, this can lead to wear and tear of power plants, and system interruptions can occur.”

Industry watchers noted that most of the buyers of the hydro plants have been trading their capacity at the Wholesale Electricity Spot Market (WESM) as this gives them more reasonable returns on their investment. Hence, these are nary intended for regulating reserve.

The other argument being presented though is for WESM to already establish the market for regulating and spinning reserves, so this particular need in the system can be efficiently addressed.

In an interview, Grid Management Committee (GMC) chairman Rolando Bacani acknowledged that the concern on regulating reserve is among the serious issues wanted to be addressed by industry stakeholders.

“We have been discussing about that due to several complaints on abnormal frequency excursions in the system and that it affects power quality,” he said. It was gathered that recommendations have already been lodged to address such particular dilemma.

PSALM is still intending to privatize the remaining hydro plants, but plea for caution intensifies because of the waning power quality in the system.

The privatization agency has also been asked to re-evaluate such experience in the proposed eventual privatization of hydro plants in Mindanao.