ERC Considers New Reserve Rules As Power Alerts Expose Grid Vulnerabilities
- May 27, 2026
Table of Contents
The Energy Regulatory Commission (ERC) is studying possible changes to the country’s power reserve requirements and other grid policies following recurring yellow and red alerts in Luzon and the Visayas, as regulators move to strengthen the country’s energy security amid supply pressures and global fuel uncertainties.
Speaking during the Economic Journalists Association of the Philippines (EJAP) Energy Forum in Makati City on Tuesday, ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said current reserve policies may no longer be sufficient to address evolving electricity demand patterns, particularly during periods of extreme heat and tightening supply margins.
Juan said the agency is considering reforms that would allow reserve requirements to respond more dynamically to weather conditions and anticipated spikes in electricity demand.
Dynamic Reserve Targets
According to Juan, flexibility shortages often occur during evening hours when electricity demand remains elevated while solar generation begins to decline. He noted that demand typically peaks at around 2 p.m., while solar power output starts tapering off between 3 p.m. and 4 p.m., creating pressure on available reserves later in the day as consumers increase electricity usage at night.
In recent weeks, the National Grid Corp. of the Philippines (NGCP) placed the Luzon and Visayas grids under yellow and red alert status after operating margins dropped below contingency requirements.
“If a heat advisory tells us the afternoon peak will be 5 percent higher than normal, we should have enough reserves to handle that,” Juan said during his presentation.
Among the proposals now being evaluated by regulators is a shift from static reserve margins toward dynamic weather-indexed reserve targets that could better anticipate demand surges during hotter periods and extreme weather events.
The ERC is also studying measures aimed at accelerating approvals for transmission service procurement and fast-ramping power capacity, while improving coordination among regulators and industry stakeholders to shorten procurement timelines.
Juan said regulators are likewise looking at expanding ancillary services to include more battery energy storage systems, demand response mechanisms, and hybrid renewable energy projects.
“Energy storage, in particular, deserves our urgent attention,” he said, noting that additional storage facilities would allow excess renewable energy generated during daytime hours to be stored and dispatched during evening peak demand.
Fragile Supply Outlook
Montañer said conditions in the Luzon Grid have improved following the return to service of several major power plants that had earlier gone offline.
“The situation in Luzon has already improved. Nakabalik naman na ‘yung major plants from last week na down sila, so hopefully wala naman, but huwag lang may major na naman na outage,” she said. (Major plants that were down last week have already returned online, so hopefully there will be no problems, just not another major outage.)
She added that supply margins are currently sufficient if power plants continue operating at full available capacity.
“So for now, if all plants are operating at their maximum capacity, the supply margin is enough,” Montañer said.
The Visayas Grid, however, has remained under yellow alert status for several days, indicating that operating reserves are below required contingency levels.
The country has been under a state of national energy emergency since March due to supply risks and price volatility linked to the ongoing conflict in the Middle East, adding pressure on policymakers to reinforce the country’s long-term energy resilience.
Future Energy Direction
The issues surrounding grid reliability, supply security, and energy transition formed part of the discussions at the EJAP Energy Forum, which carried the theme “Beyond the Crisis: Defining a New Era of Philippine Energy.”
The forum gathered government officials, regulators, power industry executives, and legal experts to discuss the country’s long-term energy direction amid continued global oil market instability.
Energy Secretary Sharon Garin outlined government efforts to strengthen energy security and expand indigenous energy development, while Juan discussed reforms and market innovations aimed at improving efficiency and consumer choice in the power sector.
Industry leaders, including Prime CoreGen president and CEO Jose Victor Emmanuel de Dios, MGEN Renewables president and CEO Dennis Jordan, and DivinaLaw senior partner Jose Layug Jr., also participated in panel discussions together with Energy Undersecretary Felix William Fuentebella and Montañer.
“The crisis exposed real vulnerabilities in the country’s energy sector — vulnerabilities we can no longer afford to ignore,” EJAP president John Ted Cordero said.
“This forum brings together the voices that matter most in shaping what comes next. The path forward will not be easy, but the direction is clear: a more secure, more resilient, and more inclusive energy future for all Filipinos.”
Source:
