WESM Eyes 3-Tiered System Upgrades

Manila Bulletin

October 20, 2012, 5:04pm

To prepare for the more complex set-up of its operations, including the integration of renewable energy and open access in the power industry, the Wholesale Electricity Spot Market (WESM) will need to undergo at least three phases of system upgrades.

This was disclosed by Philippine Electricity Market Corporation (PEMC) President Melinda L. Ocampo, noting that these will be on top of the proposed establishment of a third spot market in Mindanao.

The existing market management system (MMS) of the WESM alone already needs an upgrade, a project that it already applied for an allocation with the Energy Regulatory Commission.

The other enhancement in the WESM system will be in preparation for the deluge of trading participants which will be coming from the league of qualified end-users in the open access and retail competition regime of the restructured electricity sector.

Another layer of information technology (IT) system reinforcement will be for the integration of renewable energy capacities in the market, with WESM assuming the function of tracking the volumes of RE being traded in the market.

Ocampo noted that all of these market system enhancements will require additional budgets, but the sources for some have not been clearly delineated yet.

For the estimated P50 million capital outlay to add a “tracking system” for the RE market, she noted that the Department of Energy (DOE) has yet to identify where the budget will be coming from.

On the software enhancement of the existing WESM-MMS, the market operator is already seeking a regulatory approval for an allocation of P331 million.

Even with the initially-framed upgrade, Ocampo has indicated that they may still incur additional spending to prepare the market for the anticipated entry of more than 800 open access participants.

She has emphasized that the preparation must be set further into the future when household end-users, through wholesale aggregators, will already be qualified for open access and their prospective suppliers will be required to undergo mandatory registration as WESM participants.

For the RE market design, Ocampo has noted that this will only be finalized upon the energy department’s issuance of the final Renewable Portfolio Standards (RPS).  At present, that policy is still under crafting phase. (MMV)    source