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WESM to launch Mindanao spot market by June

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Wholesale Electricity Spot Market (WESM)

THE Independent Electricity Market Operator of the Philippines (IEMOP) said Thursday that it hopes to begin commercial operations in Mindanao by late June, while also launching the enhanced design of the market in the Luzon and Visayas over the same time frame.

Last month the Energy Regulatory Commission approved the WESM’s (Wholesale Electricity Spot Market) Price Determination methodology, in the form of a manual of WESM guidelines, principles and pricing mechanisms.

IEMOP is a non-profit corporation that operates the WESM and the central registration body for the retail competition and open access. WESM is the venue for generators to sell excess power not covered by contracts, and where customers can buy additional output on top of these contracts.

In a statement Thursday, IEMOP said the approval signaled the implementation of WESM in Mindanao, and the upcoming transition of the five-minute market for scheduling and dispatch intervals in Luzon and the Visayas islands.

“The launch date for these developments in WESM is now targeted for June 26, 2021,” IEMOP said in a statement.

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IEMOP Operations Planning and Modelling Manager Edward I. Olmedo said in a briefing Thursday the organization is still in the process of registering Mindanao-based facilities in the WESM.

“We need to complete first their registration in the WESM. So that is expected to be part of our target completion in the first quarter of 2021,” Mr. Olmedo told reporters. IEMOP estimates that some 18 facilities out of 87 expected participants have registered for the WESM Mindanao market.

For the WESM to begin commercial operations in Mindanao by June, the Department of Energy must give the go signal by May, he said.

Mr. Olmedo added that by the first quarter, IEMOP hopes to complete an audit of enhancements and focus group discussions on overall market readiness.

During the fourth quarter of 2020, market prices continued to drop, to P1.96 per kilowatt-hour (kWh), according to IEMOP.

“The price drop can be attributed to the declining rate of customer transactions as compared to the same period in 2019. Energy consumption for December 2020 also decreased by 2.0% which is equivalent to 126 GWh (gigawatt hours) in comparison to the consumption recorded in December 2019,” IEMOP said.

It added that the decrease in system demand last month was caused by the holidays and the holiday associated with the Feast of the Immaculate Conception, which took place on Dec. 8. However, the market operator noted that there were several instances of high prices due to a number of forced and planned outages.

According to IEMOP, total output last year declined 5.5% to 79,354 GWh from 83,982 GWh. “Similar with the previous years, coal and natural gas plants accounted for more than three-fourths of the generation mix,” it said. — Angelica Y. Yang

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