Interim mart to bring 360MW to Mindanao

Business Mirror

Published on Sunday, 21 October 2012 18:17

Written by Paul Anthony A. Isla / Reporter

THE Department of Energy (DOE) is looking at an additional 360 megawatt (MW) of generating capacity that could be tapped once the Interim Mindanao Electricity Market (IMEM) is established, Undersecretary Josefina Patricia Asirit said on Friday.

In a press interview, she said the IMEM is seen to make available the untapped generation capacity. “The bigger ones identified, with inventory and will meet them,” she added. Asirit said the Energy Regulatory Commission (ERC) is also on board to look into the process. Asirit said consumers in Mindanao are questioning how much prices could be affected by the IMEM.

Based on Philippine Electricity Market Corp. (PEMC) simulations, Asirit said the blended rate impact will be around P0.30 per kilowatt-hour.

She said the DOE is conducting information and education programs, and that it is also helping the National Electrification Administration (NEA) in coordinating with the electric cooperatives.

Asirit said they are also considering to tap the P119- million budget allocated for retail competition and open access to fund the IMEM. The budget, she added, is pending release with the Department of Budget Management (DBM).

Asirit said a mechanism is being arranged with the ERC on how to channel funds from the PEMC to the IMEM.

Energy Sec. Jose Rene Almendras earlier said the Interim market mechanism will include the setting up of a temporary power market in Mindanao similar to the Wholesale Electricity Spot Market (WESM).

Almendras said the market will help investors go to Mindanao is if they are assured of a mechanism where they can sell power.

“We’re trying to look for a way to dispatch ancillary power in Mindanao in a fair pricing mechanism. Everything is still way up in the air as to how exactly we’re going to do it,” he said.

Almendras said what they have in mind is mechanism that would a fixed price unlike in the WESM where the price is not fixed as determined by supply and demand.

He said the only way one can dispatch ancillary service is by putting a market that will allow it.

“Otherwise, they will not be dispatched since they have no contracts as nobody will sign baseload contract with them,” he said.

In Mindanao, there are diesel plants or a lot of existing diesel plants are rehabilitated. Almendras said, these are the most ideal facilities for ancillary service.

Before they could set up a hybrid power market, Almendras said they will have to wait until the ancillary production levels will improve.

“There should be enough reserves. And when the coal-fired start operation, perhaps it could also be possible to have the baseload capacity from coal fired power plant, while the hydroelectric power plants are shifted to ancillary,” he said.

Almendras said that for as long as there is rain, there is enough power supply in Mindanao. Supply there becomes critical only during El Nino.

 “Nevertheless we don’t think we can implement WESM in its full form in Mindanao. So we’re trying to pick what is needed to establish a semi-dynamic spot market in Mindanao. It can be supply bidding or nomination format, we’re studying all sorts,” Almendras said.    source