PEMC prepares for Visayas operations

After the successful operation of the wholesale electricity spot market (WESM) in Luzon, the Philippine Electricity Market Corp. (PEMC) is now preparing for the start of the Visayas WESM.

"Since last year, the trial operation program for the Visayas region has been ongoing in preparation for its integration into the WESM. We’re currently setting up the local office in the region to establish our presence," PEMC president Lasse Holopainen said. PEMC is the operator of WESM.

Holopainen, however, noted that they would need to study further the Visayas power supply situation to determine if they could start WESM in the region.

"We continue to assess as to whether WESM operations in the Visayas given the local supply situation, are viable, and will make a recommendation to the Department of Energy (DOE) at the appropriate time," the PEMC chief said.

The commercial operation of WESM in the Visayas is targeted to commence early next year.

Holopainen said the Luzon WESM has concluded its second month of commercial operations with "better coordination among the market players and more efficient operations being sustained."

"We are extremely pleased with the way WESM operations have proceeded thus far, since the problems and issues that came up were quite manageable," PEMC vice president for WESM operations Mario Pangilinan said.

Earlier this month, PEMC marked the first month of WESM operations, with the price of electricity traded from June 26 to July 26 averaging two pesos and seventy-nine centavos per kilowatt-hour (P2.79/kwh). 

During the second month of WESM commercial operations covering the period July 26 to August 25, the price of power in the market averaged P2.89/kwh, slightly higher than the first month.

PEMC officials said the increase was due to lower supply brought about by the outages of plants undergoing maintenance and slightly increased demand as rainfall decreased during this period.

Holopainen said the "relatively low" price in the first month of operations was due to the high availability of cheaper power from hydroelectric plants owing to abundant rains and lower demand due to cooler temperatures.

"Increasing demand over the next few months will be driven by industrial loads as manufacturing increases prior to the holiday season. This should, in turn, cause WESM prices to increase until then, and drop back down in the first quarter of next year before peaking again during the summer."

The PEMC head also noted that during the power spot market’s maiden month, "there were no significant breaches of the WESM trading rules and no incidents of overt or implied price manipulation was evident or was reported."

"We still need to improve the coordination between the plant operators and the trading participants in many respects. We are holding monthly update meetings among the power generators, distribution utilities and other market participants to clarify the operational issues with them and discuss how these may be resolved," Pangilinan added.