IEMOP gears up for new WESM system, Mindanao spot market

 

By Lorenz S. Marasigan January 28, 2021

https://businessmirror.com.ph/2021/01/28/iemop-gears-up-for-new-wesm-system-mindanao-spot-market/

 

The Independent Electricity Market Operator of the Philippines Inc. (IEMOP) is gearing up for the launch of the Wholesale Electricity Spot Market (WESM) in Mindanao, with majority of the participants now advancing in different stages of registration. 

Robinson Descanzo, the COO of IEMOP, said his group is committed to meeting its June 26 target of officially starting the commercial operations of WESM Mindanao. 

“We recognize that Mindanao is challenging. Currently, fully-registered participants number to 18 out 87, but almost 30 are already at the advanced stages. The others have yet to submit additional documents,” he said during a media briefing on Thursday. 

According to the latest data of IEMOP, the operator of WESM, most of the fully-registered participants are grid connected generators, embedded generators, and directly connected customers. 

Embedded generators, electric cooperatives, and private distribution utilities are either completing their initial prudential requirements, signed up and have pending submissions, and are currently completing other conditions. Three have yet to apply. 

Descanzo said his group has sought the assistance of the Department of Energy (DOE) to encourage Minandao participants to finish their registration to the WESM. 

“We reported again the updated report to DOE. We asked the DOE to assist us to enjoin the participants in Mindanao to complete their registration so that we can start a mock market environment as soon as possible, in time for their target market live by June,” he said. 

The WESM in the Mindanao Grid was launched in June 2017. Back then, IEMOP was expecting the commercial operation to commence in December 2020. But improvements in the software system must take place before the WESM in Mindanao and the launch of the upgraded WESM design takes place.

The WESM is the country’s trading floor of electricity. It is a centralized venue for buyers and sellers to trade electricity as a commodity, where prices are based on actual use (demand) and availability (supply). WESM started commercial operations in the Luzon grid in June 2006 and in December of 2010 in the Visayas grid.

The adoption of the enhanced WESM design and operations provides, among others, a shorter dispatch interval of 5 minutes which will result in better pricing signals as it instantly reflects the changes in supply and demand, and potentially reduce the requirement for frequency regulation reserve which is beneficial to consumers.

The enhanced WESM design and operations is expected to go live on June 26 as well. 

 

Demand to surge through June

In another development, IEMOP Manager for Pricing Validation and Analysis John Paul Grayda said the peak demand for electricity is expected to rise between February and June, as the summer months typically result in more energy consumption. 

IEMOP, he said, forecasts peak demand to rise by 5 percent year-on-year through June, which will also result in higher spot prices. 

“With demand growth rate of 5 percent, in terms of peak demand, that is 11,847 MW,” he said. “The resulting prices will play between P2.28/kWh and P3.7/kWh this coming June.”

Electricity spot prices dropped at P1.96/kWh in December, as consumption for the said period decreased by 2 percent to 126 GWh.