DOE amends electricity spot market rules

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The Department of Energy (DOE) has issued two circulars that amend the rules in the Wholesale Electricity Spot Market (WESM), a move that will make sure that consumers get reliable and reasonably priced power supply.

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For instance, the DOE issued a circular that will enhance the operational efficiencies of oil-fired power plants, as these facilities need not run continuously for 24 hours since most of these have no bilateral contracts.

This circular particularly relaxes the provisions under the “Chapter 3.1.1” of the WESM manual on registration, suspension, and deregistration criteria and procedures on generating units.

Because of this, generating units with fast start capability, duly certified by the system operator National Grid Corp. of the Philippines (NGCP) will no longer be required to run based on their registered minimum stable loadings (Pmin), but will continue to submit offers in the WESM.

The DOE said that with the help of this amendment, the capacity gap in the WESM will be reduced and allow power generators to avoid penalties when it is running on below minimum power supply, provided that these plants can supply power as soon as it is demanded.

The circular directed the NGCP, in consultation with the Grid Management Committee, to determine and submit to the DOE a certified list of all the generation facilities with fast start capability, which shall serve as basis of the Philippine Electricity Market Corp. (PEMC) in allowing generating facilities to change their Pmin registration to lower level or at zero megawatt.

The DOE also issued a circular designating the 650-megawatt Malaya Thermal Power Plant as a must-run unit (MRU) in the WESM.

The Malaya Plant, an oil-fired government-owned power plant located in Pililia, Rizal, consists of two generating units capable of providing reactive power support or voltage support to the grid, being strategically located in a load center.

Under the WESM rules, an MRU is a generating unit identified and instructed by NGCP to provide the needed power supply on a real-time basis or on a particular schedule deemed necessary.

With the circular, the Malaya Plant will also be exempted from the must-offer rule of the WESM, which requires all generation companies registered in the WESM to declare and offer their respective maximum generating capacities in the spot market to prevent capacity withholding by the power plants.

The circular mandates the Power Sector Assets and Liabilities Management Corp. to ensure efficient operation, readiness as an MRU, and availability of fuel of the plant as well as to coordinate well with the PEMC.

Moreover, the amendment subjects PEMC to ensure that the Malaya plant will be compensated under the MRU settlement, in accordance with the specified schedule of the system operator.

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