THE Department of Energy (DOE) has released a new policy meant to enhance the Wholesale Electricity Spot Market (WESM) design and operations.
Department Circular (DC) 2015-10-0015, signed by Energy Secretary Zenaida Monsada on October 23, institutes some changes in the spot market’s software features meant “to ensure the reliability of the WESM operations and to implement the recommendation specified in the WESM design study.”
The WESM is the country’s trading floor for electricity. In a nutshell, DC 2015-10-0015 serves as the guide in upgrading the systems of the WESM and direction in modifying the WESM rules. It promotes greater coordination and integration of Philippine Electricity Market Corp. (PEMC) and National Grid Corp. of the Philippines (NGCP).
PEMC is the WESM operator, while NGCP is the grid operator. In the circular, their respective responsibilities were cited.
Section 2 of the circular outlines the so-called enhancements in WESM design and operations. Among these are the following:
- Mandatory integration of distribution utilities’ (DUs) subtransmission network, which materially affects dispatch schedules and prices in the WESM, into the Market Network Model;
- Shorter trading and dispatch interval of five minutes;
- Imposition of WESM offer cap and floor for energy and reserves as determined through joint study by the DOE, Energy Regulatory Commission and PEMC; and
- Implementation of hourly Day Ahead Projection with sensitivities and Hour-Ahead Dispatch.
The DOE, when sought for comment, said “these changes, for example, on shorter trading intervals to five minutes from 60 minutes, would result in more efficiency and a reduction in the need for market intervention and wild swings in market prices.” The new circular, the DOE added, also formally laid out the need for DUs to integrate their systems to the WESM.
“Like any other rules, this was subjected to public consultation and posting of draft for comments by industry participants. It was more than a year in the making,” it added.
The Manila Electric Co., the country’s largest DU, did not reply when sought for comment.