Guidelines on WESM reserve market out

by Lenie Lectura, January 18, 2015
from BusinessMirror

The Department of Energy (DOE) has recently issued a circular approving the guidelines in the scheduling and dispatch of reserve-power capacities at the Wholesale Electricity Spot Market (WESM).

“The central scheduling and dispatch of energy and contracted reserves would provide the DOE better monitoring of all available generation capacity in both energy and reserve, and provide more preparations to the participants for the eventual commercial operation of the WESM reserve market,” Department Circular 2014-12-0022 stated.

The WESM reserve market basically provides back-up power that could be tapped by the National Grid Corp. of the Philippines (NGCP).  As such, there is a need for the DOE to craft a protocol that “provides for the mechanism to centrally schedule all energy and reserve capacities” at the spot market.

Central scheduling refers to the activities taken prior to commercial launch date of the WESM reserve market for the purpose of central dispatch of energy and reserve categories traded in the WESM. It intends to reflect the entire capacities in the WESM, including reserve capacities contracted by NGCP, so these can be centrally scheduled for either energy or reserve.

The DOE said the protocol shall apply to the market operator, which is the Philippine Electricity Market Corp. (PEMC);  the system operator,  which is the NGCP;  and all WESM members for a limited period, and shall immediately cease upon new commercial launch date of the WESM reserve market.

“PEMC, NGCP and all affected trading participants shall ensure compliance with this circular and the protocol for the better achievement of this policy. PEMC shall continuously submit an assessment report to the DOE on its implementation of this protocol and the development of the WESM reserve market,” the circular stated.

Among others, the protocol includes submission of generation and reserve offers, scheduling of reserve dispatch and  reserve requirements. All trading participants, for instance, shall submit their generation and reserve offers, consistent with the WESM timetable for the week-ahead and day-ahead market projections to provide a more accurate determination of reserve requirements.

The reserve market was supposed to start in March last year but was put off, pending regulatory approval for the pricing and cost-recovery mechanism of the reserve market.


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