WESM gearing up for enhanced spot market

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By MYRNA M. VELASCO, Contributor
June 2, 2021

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THE Independent Electricity Market Operator of the Philippines (IEMOP) is gearing up for the commercial launch of the Enhanced WESM Design and Operations (EWDO) of the spot market on June 29, this year, which would integrate the Mindanao system with that of the Visayas and Luzon grids.

EWDO is the entity that operates the Wholesale Electricity Spot Market (WESM) in the country.
    
IEMOP President Richard Nethercott indicated that they have been taking “necessary measures to keep up with the global trends and to come up with innovative solutions,” and these are generally aimed at enhancing market efficiencies.
    
The key features of the new system include the shorter interval of trading for the participants, from previously one hour to 5-minute interval; then the enforcement of just one pricing system for settlement; and the removal of the PMin or minimum stable load of the generating facility being traded in the market.
    
The WESM operator noted that prior to the actual schedule when the EWDO will go live, the market participants had been provided with protocols for the conduct of the limited live dispatch operations (LLDO) for Luzon, Visayas and Mindanao – and that will commence on Saturday (May 29).
    
“This effort is in line with the market operator’s pursuit to provide sustainable market solutions and services to its stakeholders and participants,” the company said.
    
The operational launch of the long-awaited WESM in Mindanao will coincide with the commercial operations of the EWDO or the enhanced trading platform for the integrated Luzon and Visayas spot market.
    
Meanwhile, Robinson Descanzo, chief operating officer of IEMOP, said the current rise in power usage had been mainly traced to the warmer temperatures that have been prevailing because of the summer season.
    
He added “the abrupt increase in demand was coupled by lower supply levels due to generator outages,” as well as the recurring gas restriction dilemma of the Malampaya field.
    
As presented to the media by Engineer John Paul Grayda, manager for pricing evaluation and analysis of IEMOP, demand for electricity in Luzon had risen to 11,091 megawatts in the May supply month, which had been higher by 971MW versus April supply month.
    
The scale of available supply in May was slightly lower at 13,219 megawatts vis-à-vis 13,355MW in April; and that was mainly due to the persistent plant outages that have been taking out more than 3,000MW of capacity from the system.
    
The significantly hotter weather conditions, Grayda noted, also sparked off escalation in prices in the WESM – hitting an average of P7.72 per kilowatt-hour in May as against P3.85 in April and P4.16 per kWh in March.
    
IEMOP further pointed out that because of outages-strained supply in the power system, “these resulted in occurrences of high market prices,” that in turn had triggered the imposition of the secondary price cap for several days in May.
    
“The secondary price cap is a price-mitigating mechanism designed to limit the persistent high market prices,” the power spot market operator has explained.
    
The WESM operator likewise manifested “an increase in the volume of customer-transactions for the first four months of the year which amounted to 25,129 gigawatt-hours or an increase of 3.0-percent from the previous year’s 24,388GWh,” and considered dominant generators are still the coal plants.

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