DOE to issue new dispatch rules for WESM this week

by Myrna Velasco – November 20, 2015

from Manila Bulletin

The definitive go-signal of the Department of Energy (DOE) on revised central scheduling and dispatch for the mandated enhancements on the Wholesale Electricity Spot Market (WESM) is anticipated to be issued this week.

This was indicated by Philippine Electricity Market Corporation (PEMC) President Melinda L. Ocampo, stressing this is necessary in line with plans to rework the spot market’s trading platform from hourly to five-minute interval.

“Based on my agreement with the DOE, central scheduling is tentative this 26th of November. We hope to receive the authority before the 26th,” the PEMC chief executive said.

The well-anticipated modifications in trading arrangements at WESM is in line with the new market management system (NMMS) being pushed for the gross pool-designed electricity spot market.

Aside from energy trading which had been the key feature of the spot market in its initial ten years of operations, co-optimization is pushed with the integration of reserves in the market’s central scheduling and dispatch.

With such corresponding market transformation, the pricing as basis for settlement will also shift to just ex-ante – thus, dislodging the ex-post pricing in the previous trading platform.

In a gross pool, it was further noted that the generator-trading participants “will offer their maximum available capacity for central scheduling and dispatch” – in a manner that shall also ensure system security and level playing field among generators.

The WESM operator has similarly indicated that price offer floor and cap shall be established – with prior approval from the Energy Regulatory Commission.

“For the offer cap on energy, we have until end of December on whether it will continue or changes will be adopted,” Ocampo said.

The prevailing primary cap of P32 per kilowatt hour (kWh) as well as secondary cap of P6.245 per kWh had been extended until yearend so the tripartite body – which includes the DOE, ERC and PEMC – could have more time to sort out issues and recalculate proposed adjustments in the offer caps.

Ocampo has stated previously that based on a foreign consultant’s recommendation, the secondary cap may require upward adjustment to support the viability of some investments in the sector – primarily those that have been providing peaking power.