WESM Mindanao launch delayed anew

MANILA, Philippines — The launch of the wholesale electricity spot market (WESM) in Mindanao has been pushed back to early next year.

Commercial operations of the WESM in Mindanao has encountered numerous setbacks in the past and was eyed to start by December.

However, the launch has been delayed anew and will not happen this year.

“We are targeting to launch WESM Mindanao by the first quarter of next year,” Independent Electricity Market Operator of the Philippines (IEMOP) corporate strategy and communications head Isidro Cacho said.

IEMOP is the market operator of the WESM.

Cacho said IEMOP is working closely with the Department of Energy,  Energy Regulatory Commission,  Power Sector Assets and Liabilities Management, as well as the electric cooperatives and all the stakeholders in Mindanao for the launch of WESM Mindanao.

“We are just sorting out some details now. What we want in Mindanao is to have a robust market at the very start, everything is accounted for, everything is clear in terms of how things would be done and proceed. We need some targeted procedures for them,” Cacho said.

“In general, hopefully, we hope to launch WESM Mindanao by early next year,” he said.

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

That did not push through. The launch date was previously moved to June this year, which also did not happen.

The WESM is a venue where electricity can be traded as a commodity.

Through it, generators can sell their excess capacities not covered by contracts, while customers can also buy additional capacities on top of their contracts.

Similar to its function for the Luzon and Visayas grids, the WESM in Mindanao is seen as a venue for efficient scheduling, dispatch, and settlement of energy withdrawal and injections in the Mindanao grid.

Cacho said having WESM in Mindanao would really be beneficial in the region and would open a lot of opportunities.

The IEMOP is pushing for the launch of the Mindanao WESM ahead of the energization of the Mindanao-Visayas Interconnection Project (MVIP).

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

Cacho said based on IEMOP’s latest information, commissioning of the MVIP is “somewhere in June or July 2023.”

“Hopefully the WESM Mindanao can be launched before there will be this Mindanao-Visayas Interconnection. We all know we have a market in Luzon and Visayas so everything is accounted for,” Cacho said.

“Now, if we have the interconnection and there is still no market there, the first question is who will pay for the electricity that will flow through the interconnection. That is why we are advocating why there should be a market first in Mindanao even before the interconnection because that will sort out things in terms of accounting, in terms of the pricing. The parameters will be clear of supply demand and the resulting price,” he said.