DOE, Transco award 2 contracts for wholesale electricity spot mart

The Department of Energy (DOE) and the National Transmission Corp. (Transco) formally awarded yesterday two vital contracts to jumpstart the implementation of the wholesale electricity spot market (WESM), the second power spot market established in the ASEAN.

Marketplace Co. Pty Ltd. (MCo) of New Zealand bagged the contract for the consultancy services for the project management while Finnish firm ABB Inc. was awarded the turnkey contract for the implementation of the Market Management System (MMS) of the WESM.

The $2-million project management contract and the $8.47-million MMS contract are the key components for the implementation of the WESM, one of the major reforms mandated by the Electric Power Industry Reform Act (EPIRA).

The two projects will be funded by the Asian Development Bank and the Japan Bank for International Cooperation (JBIC) through the Electricity Market and Transmission Development Project.

"We thank the ADB and the JBIC for providing the financing for this landmark undertaking, a showcase of their steadfast commitment to assist and support the Philippine government in restructuring the electricity industry," DOE Secretary Vicente Perez said.

The contracted project manager will provide expert advice to the market operations group in establishing the necessary infrastructures leading to the commercial operation of the WESM. MCo is also expected to provide consulting services in the coordination and supervision of the different projects and activities to be undertaken to kick-off the establishment of the spot market.

The MMS contract, on the other hand, will provide the necessary information system (IS)/information technology infrastructure for reliable and efficient operation of the WESM. The MMS includes a network of computer hardware and software platforms to support vital WESM functions, such as electricity trading operations, administration, metering, settlements and accounting. Training, documentation and trial operation are also part of the MMS.

Perez said WESM will commence operations 285 days following the signing of the contracts.

The WESM is the market where the trading of wholesale electricity will be made, wherein power plants will compete against each other to supply electricity to the grid.

With WESM in place, competition in the generation of electricity will be encouraged, leading to a more efficient and reliable power sector," Perez said.