Launch of WESM in Mindanao pushed

MANILA, Philippines — The Independent Electricity Market Operator of the Philippines (IEMOP) is pushing to launch the wholesale electricity spot market (WESM) in Mindanao in June to iron out issues ahead of the energization of the Mindanao-Visayas Interconnection Project (MVIP).

The power market operator recommended to the Department of Energy (DOE) to start the WESM operations in Mindanao in June, months before the targeted energization of the MVIP in October, said Edward Olmedo, IEMOP operations planning and modelling senior manager.

“We had a discussion with DOE during the (recent) WESM Mindanao readiness assessment meeting. We’re looking at really establishing the final preparations to establish WESM in Mindanao. Hopefully that happens on or before June,” he said.

The IEMOP hopes to get final declaration of the DOE on WESM Mindanao within the month.

Late last year, the DOE published a draft department circular proposing to declare the commercial operations of the WESM in Mindanao on Dec. 26, 2021.

Earlier this year, the IEMOP said the DOE is looking to launch WESM Mindanao once the MVIP starts commercial operations.

The MVIP will connect the Visayas and Mindanao grids through a high-voltage direct current (HVDC) system, realizing a one Philippine grid and allowing a power exchange of initial 450-megawatt (MW) capacity.

It covers 184 circuit kilometers (ckm) of submarine cables and 526-ckm of overhead wires connecting Dapitan, Zamboanga del Norte to Santander, Cebu.

The IEMOP made the recommendation to have enough time to address problems on how to manage the final transactions involving the exchange of power before the MVIP’s energization, Olmedo said.

He said there are concerns on how exporting and importing power from Mindanao will be done without WESM fully operating in the region.

“At least until MVIP is energized, we don’t want exchange of power without WESM. There are a lot of preparations, amendments required…Our recommendation is to operate WESM before MVIP’s energization…to have time to resolve issues on how to manage the final transactions involving the exchange of power,” Olmedo said.

Based on previous discussions, the latest target of the National Grid Corp. of the Philippines (NGCP) to energize the MVIP is October this year.

“All indications are pointing they are still on target in the fourth quarter unless NGCP encounters a new issue,” Olmedo said.

The MVIP, certified as an Energy Project of National Significance in 2018, was initially targeted for completion by December 2020, but was deferred to December 2021 due to the impact of the pandemic and subsequent quarantine restrictions across the country.

As for the registration of Mindanao market participants, an agreement was forged on Oct. 8 saying the pending registration concerns shall no longer impede the commercial operations of WESM in Mindanao.

But a month after, the DOE decided to extend the implementation of the WESM central scheduling until further notice since there are still pending registration of Mindanao participants.

IEMOP registration and stakeholder services manager Katrina Amuyot said market participants’ registration in the region is at 58 percent, or 56 out of 96 participants have completed their registration in the WESM.

“We still have Mindanao participants completing requirements to register. We continuously coordinate with them to complete their registration,” she said.

Established under the Electric Power Industry Reform Act (EPIRA) of 2001, WESM serves as the country’s electricity trading market.

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, the Philippine Electricity Market Corp. (PEMC) – the former WESM operator – also faced the difficulty of getting payments from DUs for the capacity bought in IMEM.

The push to establish WESM Mindanao was then revived and was targeted to start in October 2018, but was deferred multiple times due to the ongoing software audit being done on the NMMS to be used for the regional WESM.