The Philippine Electricity Market Corporation (PEMC) said the Reserve Market has significantly boosted power system stability since its return to commercial operations in August 2024, cutting Red and Yellow Alerts by 98.39% across the Luzon, Visayas, and Mindanao grids.

The market had been suspended in March after the Energy Regulatory Commission (ERC) raised concerns over pricing methodology, compliance monitoring, and alignment with ancillary services contracting. ERC partially lifted the suspension in mid-May, allowing 30% of settlement amounts for March transactions to be paid to generators, helping sustain their operations.

PEMC, the country’s autonomous group market operator and governing body of the Philippine Wholesale Electricity Spot Market (WESM), reported that from August 2024 to July 2025, only one Yellow Alert was recorded—occurring in Luzon last March—compared to multiple alerts during the suspension period between April and July 2024. PEMC’s Enforcement and Compliance Office attributed the sharp improvement to stronger fulfillment of reserve requirements and higher compliance from Ancillary Services Providers (ASPs).

Reserve capacity also expanded in all three major grids. Luzon’s registered reserve grew by 20.27% to 7,190.4 MW, Visayas by 27.47% to 861.7 MW, while Mindanao reported 2,417.4 MW as part of restructuring efforts to strengthen its system.

PEMC noted that flexible spot procurement of reserves supported system security, averaging 32.23% in Luzon, 61.46% in Visayas, and 11.47% in Mindanao. This complemented existing Ancillary Services Procurement Agreements and ensured broader coverage.

Compliance monitoring showed marked improvements, with fewer breaches under the Reserve Conformance Standards and the Reserve Offered Capacity Compliance rules. Financial accountability also remained in force, with penalties on confirmed breaches redistributed to end-users under approved guidelines.

“The success of the Reserve Market’s first year demonstrates its effectiveness as a cornerstone of the Philippines’ power system security framework,” PEMC said in its official statement. “The Reserve Market operates alongside existing contracting mechanisms to ensure adequate reserve capacity across Contingency, Regulating, and Dispatchable Reserve categories, supporting the country’s growing energy demands while maintaining system stability.”

What does this mean for long-term energy security and investment in ancillary services? Share your thoughts on how the Reserve Market can shape the future of the Philippine power system.

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