The Wholesale Electricity Spot Market (WESM) in Luzon and Visayas has shifted from the one-hour interval to the five-minute trading yesterday, while the Mindanao Grid was given another month to finish its registration with the spot market.
Based on a Philippine Star report, the Independent Electricity Market Operator of the Philippines (IEMOP) — WESM’s operator — began implementing the enhanced WESM design and operations (EWDO) on Sunday, as ordered by the Department of Energy in an advisory issued in May.
The IEMOP will observe the compliance of market participants for Luzon and Visayas in the first phase of EWDO commercial operations. This means that participants will be exempted from penalties in case of breach of standards in order to get used to the new setup.
IEMOP market information modelling manager Edward Olmedo said the first phase will involve observation of compliances to the dispatch protocol, which will last for one month to three months only.
Meanwhile, WESM in Mindanao has begun but only with central scheduling of capacities, which will be implemented and there will be no WESM transactions until July 25. Participants have also yet to complete their full registration.
The EWDO was created in 2013 to further enhance WESM’s competition, transparency, and robustness, which can then lead to more investments in the country’s power industry.
The IEMOP said that the transition to a five-minute dispatch and settlement interval from the current one-hour interval would greatly improve the demand forecast and remove generation imbalances that could happen in a one-hour trading interval.
It added that the reduced system balance would make the grid more secure while the generator trading participants would be able to easily comply with their target schedule.
Meanwhile, customer trading participants including distribution utilities (DUs), bulk users, and retail electricity suppliers would now have a more refined period for their bilateral contracts, which allows them to have a more robust option on having their electricity supplied through their bilateral contracts or through WESM.
The efficiencies gained from the overall transition are expected to eventually benefit Filipinos through more competitive electricity prices for DUs and those who are already participating as contestable customers under the Retail Competition and Open Access policy.