To succeed in establishing a Wholesale Electricity Spot Market (WESM) in Mindanao, the government has to review the shortcomings of the discontinued interim spot market in the region, power industry official said.
Aboitiz Power Corp. CEO Erramon Aboitiz said after the BusinessWorld Economic Forum on Tuesday that it is important to dispatch the WESM economically since many power plants will start operating in Mindanao in the next few years.
Aboitiz said, “We have to look at why it failed in Mindanao. Clearly at that time, the problem was, there was no adequate supply, so everybody was just consuming and taking whatever power is given away and they said, no that’s not our problem, we have our contracts with NPC (National Power Corporation), so there were arguments.”
“With all the power plants that are coming in, the baseload coal-fired power plants, they need a WESM to be dispatched economically. Now, the dispatch is based on whatever your contracts are to customer requirements, not on economic dispatch. I think that really has to change,” he said.
On September 26, 2013, the Interim Mindanao Electricity Market (IMEM) was launched, aiming to become a power trading hub in the region. The Philippine Electricity Market Corp. (PEMC) operated the full commercial operations in November.
In February 2014, the IMEM was suspended, with off-taker electric cooperatives in the region still owing power generators, including Aboitiz Power and the Alcantara group, over P80 million.
Aboitiz said the debt should not hinder the establishment of the WESM.
“The debt is one thing but I don’t think that should stop WESM from being implemented,” he said. “I’m not saying forget the debt, what I’m saying is let not that be a hindrance. We’re willing to work with government to spread that (payment) over a period of time and let’s not let something as important as WESM in Mindanao be stopped because of that.”
“When we have adequate supply, or adequate capacity in the system, like we have in Visayas and Luzon, who are the guys dispatching, who are responsible for what they are paying for. So I think it would be different compared to before when there was such a large shortage of capacity,” Aboitiz said.