The Department of Energy (DOE) has approved the new trading interval at the Wholesale Electricity Spot Market (WESM) of five minutes, shortened from the existing one hour.
In an advisory signed by Energy Sec. Alfonso Cusi issued on Friday (May 21), the DOE stated the new five-minute trading interval would begin commercial operations on June 26 — the same day that WESM Mindanao is set to go online.
While the DOE has approved the Enhanced WESM Design Operations (EWDO) trading platform, it said that the Philippine Electricity Market Corporation (PEMC) must be able to submit “a certification attesting to the market readiness” of the spot market’s new trading system covering the Luzon, Visayas, and Mindanao Grids.
PEMC governs the WESM, which currently only operates in the Luzon and Visayas Grids.
“The PEMC shall submit the said certification at least [one] month prior to the target date as stated above. Upon the receipt of the said Certification, the DOE shall determine its acceptability and [sufficiency]. If the DOE finds it meritorious, it shall issue another [advisory] declaring the actual commercial operation date,” the advisory read.
“In the event that the DOE does not find the Certification acceptable, PEMC and the concerned entities should immediately rectify or remedy the deficiency. Once the DOE conforms and approves the rectification and the remedies, it shall determine a new date for the commercial operation of the EWDO,” the document continued.
The EWDO is expected to improve efficiencies in the buying and selling of power and will enable the deregulated electricity sector to further mature.
The five-minute trading interval system is being implemented in more mature electricity markets, such as Australia’s.
The Independent Electricity Market Operator of the Philippines, WESM’s operator, has been pointing out that the EWDO would lessen inter-hour deviations and imbalances in power trading, leading to more competitive prices that would, in turn, benefit consumers.