DAVAO CITY, Philippines — Department of Energy (DOE) officials announced Tuesday, October 3, that the Wholesale Electricity Spot Market (WESM) for Mindanao will be fully operational by second quarter of 2018.
Energy Assistant Secretary Redentor Delola said the department is still on its trial operations for the spot market participants.
“What’s lagging behind the schedule is the implementation on the embedded generators and directly connected customers. There are test cases that need to be run yet for the market participants,” Delola said in a press conference during the Energy Investment Forum and Stakeholders Conference here.
He added that the Energy Regulatory Commission (ERC) also is yet to approve how the prices will be computed. Delola said the ERC continues to conduct hearings on this issue which could last until the end of the year.
“So we’re really looking forward to an approval hopefully by February 2018 for the price determination methodology,” he said.
The energy official said the Price Determination Methodology (PDM) sets the guidelines on how prices in the market will be computed as the department eyes having a single market and a single PDM for Luzon, Visayas and Mindanao.
Delola also said the WESM has a “very high reception” among electric cooperatives, noting they do not have problems on the implementation side.
Mindanao has an installed capacity of 3,141 megawatts (MW), but only 2,097 MW is currently available, he said, adding that this is higher compared to the average demand of 1,707 MW.
Delola said once the WESM Mindanao is fully operational there will be a new market management system for Luzon, Visayas and Mindanao, where bidding will be done every five minutes allowing the trading of electricity.
“Our target is by second half of next year, WESM Mindanao will be in full commercial operation, and Luzon and Visayas WESMs will migrate already from the 10-minute interval to the five-minute interval. So, sabay-sabay mai-implement ang new market management system sa Pilipinas,” he said. (So the implementation of the new market management system in the Philippines will be done simultaneously.)
The WESM in Mindanao was launched on June 26 through Department Circular No. DC2015-05-0009. It seeks to address the “excess supply” generation in Mindanao.
Energy secretary Alfonso Cusi, in a speech delivered during the launching of WESM-Mindanao here on June 28, said WESM Mindanao will invite more investors and improve market condition and delivery of services by electricity providers.
“WESM facilitates a transparent electricity market with which Mindanao power generators will have an avenue to trade un-contracted power supply. It will also provide consumers more sources of electricity to choose from, increasing their chances of lower-priced energy,” he said.
Under the Electric Power Industry Reform Act (EPIRA) of 2001, WESM was established to be a venue for trading electricity as a commodity.
For some organizations, EPIRA has benefited only the few who control the power sector.
“The WESM was created by EPIRA to supposedly foster competition and ensure better pricing that would reduce power rates overtime. But under conditions of monopoly control and lack of government regulation, the WESM is useless and a few big corporations are able to artificially manipulate and increase power prices,” IBON Foundation said in a previous statement.
It called on the government to repeal EPIRA and “overhaul the country’s power sector policy.” (davaotoday.com)