DOE sets rules on WESM’s system enhancement

by Myrna Velasco – November 15, 2015

from Manila Bulletin

A Circular has been issued by the Department of Energy (DOE) setting forth the forward enhancements that it requires the Wholesale Electricity Spot Market (WESM) in line with improving service to industry participants – and subsequently, for it to have favorable outcome to electricity consumers.

Under DOE Circular No. DC 2015-10-0015 signed by Energy Secretary Zenaida Y. Monsada, the department has listed the various enhancements that will soon be enforced in the WESM’s design and operations.

These include the removal of the minimum stable loadings (PMin) for power generators being deemed as constraint in the Market Dispatch Optimization Model (MDOM); and the introduction of shorter trading and dispatch interval of five minutes.

The other prescription is on the institutionalization of ex-ante pricing only “for every five-minute trading and dispatch interval” in the spot market.

There is also a mandate of one-hour settlement interval just “for settlement purposes based on weighted average of the five-minute ex-ante prices,” automated pricing corrections; and mandatory integration of distribution utilities’ sub-transmission network, which materially affect dispatch schedules and prices in the WESM and its market network model.

The spot market enhancements shall also cover change in the “values and priorities of some of the constraint violation coefficients (CVCs), including the corresponding values…taking into consideration the imminent implementation of the WESM Reserve Market.”

The department similarly requires the “imposition of WESM offer cap and floor for energy and reserve as determined through joint study by the DOE, Energy Regulatory Commission (ERC) and the PEMC (Philippine Electricity Market Corporation).”

The rest of the market improvements shall delve with implementation of the hourly day-ahead projection with sensitivities and hour-ahead dispatch; and the implementation of nodal-based short-term demand forecasting.

There have also been enhancement requirements being set for system operator National Grid Corporation of the Philippines (NGCP) to keep pace with the mandated adjustments in the operations of the country’s power spot market.

The energy department has emphasized that the Circular will take effect 15 days “from its publication and shall remain in effect until otherwise revoked.”

The power spot market is pursuing reinforcements in its market management system (MMS) that is targeted for completion by the year 2017.