DOE sees launch delay of new WESM trading platform

Published October 18, 2017, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2017/10/18/doe-sees-launch-delay-of-new-wesm-trading-platform/

A signal had been set out by the Department of Energy (DOE) that the new market management system (NMMS) or the advanced trading platform of the Wholesale Electricity Spot Market (WESM) will be delayed on to its full commercial operation.

The NMMS was targeted fully operational June this year, but no less than energy officials have admitted before the 16th CEO Forum and General Membership Meeting of the Semiconductor & Electronics Industries in the Philippines (SEIPI) that such timeline is already being thrown into the air and that the revised target is 2018.

In the speech of Energy Secretary Alfonso G. Cusi at the event, as delivered by Undersecretary Felix William Fuentebella, he announced that “the NMMS is expected to be fully operational by 2018 pending the completion of software certification audit.”

The department has not given further details on the scope and extent of audit being done on the underpinning information technology (IT) system of the electricity spot market.

Fuentebella just emphasized that the DOE has been batting for “improvements in WESM operations through rules review and changes, and conduct of WESM audits.”

Industry players previously sounded off pressing “technical-related issues” on the new dispatch interval set forth in the WESM’s NMMS design.

Those with baseload capacity, including the coal plants, which often run on 24-hour duration, also raised concerns on the removal of the minimum stable loading (PMin) in the market trading system because that could compromise the technical viability of their plants’ operations.

Beyond the issues raised by market participants, it was further gathered that the fortified market system cannot really move to “actual settlements phase” because the price determination methodology (PDM) application of Philippine Electricity Market Corporation (PEMC) is still pending for approval of the Energy Regulatory Commission.

Concurrently, for WESM-Mindanao that was launched June this year, the three-month trial operations program (TOP) will also be on stretched duration for reasons that the department has not detailed out yet at this stage.

“The target commercial operation (of WESM Mindanao) is June 2018,” Fuentebella said. That was almost a year from when that spot market had been initially targeted operationalized for the capacity trading of un-contracted volumes in Mindanao grid.

Fuentebella emphasized “the market intends to establish a central dispatch system to optimize available capacities.”

It has been the energy department’s wish that WESM-Mindanao will be providing “price and other techno-economic signals that will further encourage investments in additional capacities in the region.”