Mindanao power spot market starts trial run on June 26

MANILA, Philippines - Philippine Electricity Market Corp. (PEMC) will start trial operations of the wholesale electricity spot market (WESM) in Mindanao on June 26 to serve as a transition period for energy stakeholders following the Department of Energy (DOE) declaration of its launch this month.

PEMC, the operator of WESM, has released the trial operation guidelines and test plan for Mindanao participants comprised of generation companies, power distributors, bulk-users that are directly connected to the transmission grid, and the National Grid Corporation of the Philippines (NGCP) as the system operator and metering services provider.

The trial operations program – which shall commence in June 26 – contains a set of preparatory activities that aim to familiarize all Mindanao participants in the implementation of the WESM via the market systems and procedures to be deployed.

PEMC said Mindanao participants are expected to be involved in the conduct of end-to-end testing of all interfaces and systems that will involve simulations of all processes such as registration, bid submission, pricing and scheduling and settlement.

At present, 29 participants signified their intention to participate in the trial operations.

Prior to the launching of WESM Mindanao, PEMC held a kick-off meeting last May 25 to discuss the market systems to be deployed and on-site installation of user access interfaces was also undertaken.

It also arranged hands-on trainings to acquaint the participants of the user interfaces.

To ensure readiness of participants prior to the commercial operations of the spot market, PEMC has lined up several capacity-building activities parallel to the trial operations program.

PEMC president Melinda Ocampo said operating an electricity market for the whole country will usher in transparency and competition in the generation sector.

 “We are looking forward to our presence in Mindanao as we fully realize the vision of EPIRA in the creation of a one WESM where benefits of efficiencies in electricity trading shall redound to the benefit of Mindanao end-users through a transparent and reasonably-priced electricity,” she said.

Established under the Electric Power Industry Reform Act (EPIRA) of 2001, WESM serves as the country’s electricity trading market. Currently, PEMC operates the country’s electricity spot market in Luzon and Visayas.

Mindanao was not part of the WESM and its power grid is not connected to the national grid.

Instead, an Interim Mindanao Electricity Market (IMEM) was set up on Sept. 26, 2013 and started full commercial operations on Nov. 26, 2013 as a trading floor for electricity in the region.

However, this was suspended in February 2014 following a grid-wide power interruption in the region, preventing power companies with excess generating capacity to offer their output to distribution utilities (DUs).

Apart from instances of power interruptions during its operations, PEMC also faced the difficulty of getting payments from DUs for the capacity bought in IMEM.