Spot market launched in Visayas

Sunstar Bacolod

THE Department of Energy (DOE) launched the Wholesale Electricity Spot Market (WESM) in the Visayas at the La Proa of L’Fisher Hotel, Bacolod Tuesday night.

The launching came after Energy Secretary Jose Rene Almendras revealed that Visayas has 250-megawatt undispatched power due to the absence of a mechanism to send out intermittent supply or picking power supply.

Almendras said the spot market will be available starting December 26 when Central Negros Electric Cooperative (Ceneco) and other electric cooperatives in the Visayas would end their contract with the National Power Corporation.

“The main purpose of WESM is to solve power interruptions or brownouts,” he said.

WESM is a venue where electricity made by power-producing companies are centrally coordinated and traded like any other commodity in a market.

As a wholesale market, it is open to distributors, directly-connected customers, large users, and eventually, supply aggregators. As a spot market, electricity is traded on a real time basis or on the “spot”.

The WESM's role in the country's overall energy reform is to create a fair, transparent and reliable trading environment that will attract investments and encourage healthy competition leading to the ultimate objective of cheaper electricity for all consumers.

The WESM aims to provide incentives for the cost-efficient dispatch of power through an economic merit while guaranteeing the security and reliability of the power system; create reliable price signals to assist participants in weighing investment options; provide and maintain a fair and level playing field for suppliers and buyers of electricity.

The WESM was established after RA 9136 or the Electric Power Industry Reform Act of 2001 (Epira) was signed into law on June 8, 2001.

The main objective of Epira is to have a power industry that would reflect the true cost of electricity, where stakeholders are empowered to make choices in regard to critical market decisions, and where there will be a marked improvement in the delivery of power supply to end-users due to greater competition and higher levels of efficiency through the creation of a competitive electric power market or the Wholesale Electricity Spot Market.

On 26 June 2006, the WESM commenced commercial operations in Luzon for the trading of energy, upon declaration by the DOE.

Both the DOE and the Energy Regulatory Commission perform regulatory oversight functions over the WESM.

Almendras said WESM also welcomes new generation plants. (Teresa Ellera-Dulla)

Published in the Sun.Star Bacolod newspaper on December 15, 2010.