Electricity spot market braces for intermittent RE integration

by Myrna Velasco, 25 February 2015
from Manila Bulletin

The so-called ‘emerging’ renewable energy technologies are must-dispatch in the Wholesale Electricity Spot Market (WESM), but beyond their mandated integration into power grids, the market also has to develop and harmonize systems in addressing the intermittency of some technologies.

The RE developments, primarily those within the installation caps approved by the Department of Energy (DOE), are considerably well-incentivized via the feed-in-tariff (FIT) subsidy which consumers will pay out of their pockets.

There are RE FIT-backed technologies already proven more stable and predictable in their level of generation – such as biomass and run-of-river hydro — but scale would still be a challenge if referenced on base load needs of a power system.

With many RE plants already in commercial operation, the next hurdles will be full integration into the country’s electricity system as well as in the operations of the electricity spot market.

So far, in a press statement, WESM operator Philippine Electricity Market Corporation has vouched its “readiness for the integration of RE resources in the electricity bourse.”

Being must-dispatch, the RE capacities could have a “tempering effect” in electricity spot prices in particular trading circumstances, it said.

PEMC added “as a consequence of the preferential dispatch, eligible RE resources shall be given priority to inject to the grid as price takers displacing expensive fuels.”

It stressed that such “may possibly result in lower prices in the spot market as observed by other power exchanges.”

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