Power reserve market facing delays

Manila Bulletin 
By Myrna Velasco
September 8, 2013 (updated) 
The establishment of a reserve market that will co-optimize the dispatch of regular energy and ancillary services will be facing delays, but Energy Secretary Carlos Jericho Petilla is hoping that it can still secure regulatory approval within the year.

“My target is September 2013, and that is not happening, But I’m still targeting that we can get approval within the year…it’s a slim chance, but I’m hoping it will be approved,” the energy chief stressed.

The design and rules of the proposed reserves market had been lodged for the go-signal of the Energy Regulatory Commission (ERC) since 2009, but there have been submissions required from relevant parties to underpin the petition – and such requirements took some time to be complied with.

The trading for ancillary services to be procured by transmission provider National Grid Corporation of the Philippines (NGCP) is already integrated in the algorithm of the existing Market Dispatch Optimization Model (MDOM) of the Wholesale Electricity Spot Markets, so it will not take that long to implement it once the ERC approval is secured.

According to industry players, the reserves market will give power generators the flexibility to set offers for either regular energy or AS, hence, they can reach certain level of co-optimization of their capacities.

There are five types of AS that power providers could bid for depending on their compliance to technical criteria set by NGCP. These are regulating reserve, contingency reserve, dispatchable reserve, reactive power support and black start services.

Petilla said simulations are being done as to how tight supply would be in the Luzon grid in the next two years; and the anticipated co-optimized dispatch of capacities with the integration of reserves market is seen helping ease such constraint.

Each type of AS has some functions to ensure the reliability and security of the grid, as well as in the delivery of quality power to end-consumers.

Regulating reserve (RR) which is set at 4.0-percent of forecast grid demand at a particular trading interval would address frequency imbalances in the system; while contingency reserve (CR) is the capacity allocated and can be made immediately available whenever total supply or generation in the grid is reduced due to tripping of a generating unit or loss of transmission line link or loss of a single circuit interconnection.

The reference volume of procurement for the CR is typically the largest unit which could be made available online – which according to NGCP, should be at 647 megawatts.

Within specified interval, the CR must be replenished by a dispatchable reserve and this can be offered by power generators with ‘fast start’ capabilities.

The black start service, on the other, is needed when an event or significant incident will result in a partial or total system blackout.   source