PEMC partners with NGCP in launching WESM Mindanao

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Following the lead of the Department of Energy (DOE) in the establishment of a wholesale electricity spot market (WESM) in Mindanao, the Philippine Electricity Market Corporation (PEMC), in partnership with the National Grid Corporation of the Philippines (NGCP), supports the conduct of public consultations in key cities in Mindanao.

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In the draft DOE circular on the establishment of WESM Mindanao, PEMC as the designated market operator, is tasked to ensure the readiness of all Mindanao electricity players by conducting trainings and trial operations on February 26 with market participants joining by March 24, and June 26 set as the target launch date.

Mindanao is the only major island group in the country that has no spot market, mainly due to lack of stable power sources in the last two decades. The WESM, operated by the non-stock, non-profit PEMC, started in Luzon in 2006 with the Visayas following two years later.

Beginning last year, several new coal-fired power plants in Mindanao started operating, leading to a surplus that can be offered on a spot market.

The southern island now has a 500 to 800 megawatt (MW) power surplus, according to the National Grid Corp of the Philippines.

This surplus is expected to increase to at least 1,000 MW by the end of the year as other new plants come online.

While NGCP, as the system operator, network service provider and metering services provider, plays a crucial role in ensuring the availability and robustness of all transmission and metering facilities in the Mindanao grid for the efficient operation of the electricity bourse.

“PEMC’s experience in administering the market is vital in the integration of the Mindanao grid in the WESM with expertise and IT system in place. This will be beneficial as this will obviate additional costs in setting up a separate infrastructure for Mindanao,” PEMC President Melinda L. Ocampo said on Thursday.

“From the grid operator’s perspective, NGCP assures the public that its facilities are ready to take on this new initiative by the DOE,” NGCP President Henry Sy, Jr. said.

PEMC met the Mindanao electric cooperatives in a meeting last February 9 at Waterfront Insular Hotel, Davao
City, Ocampo stressed that WESM shall bring transparency and efficiency in electricity trading in Mindanao which will provide accurate price signals to guide investment decisions and broaden consumer choice.

Following the posting and call for comments on the draft guidelines for the market on its Website last month, the DoE held its first consultation in Cagayan de Oro City on Monday. Succeeding discussions are scheduled in Zamboanga City on Feb. 17; Davao City, Feb. 21; Butuan City, Feb. 28; and General Santos City, March 7.

In a statement, the Mindanao Development Authority (MinDA), which is part of the Mindanao Power Monitoring Council, welcomed the development saying the WESM “will serve as an open electricity market for power stakeholders, which will allow more opportunities for infrastructure development in the island-region.”

Meanwhile under the DOE draft circular,the National Electrification Administration (NEA) is instructed to “ensure that all Mindanao electric cooperatives are technically and financially prepared to operate under the deregulated electric market,” based on what is specified in the Electric Power Industry Reform Act.

Aside from helping cooperatives prepare to participate in the WESM, NEA is also tasked to help them secure “sufficient amount of prudential guarantees and filing with the ERC (Energy Regulatory Commission) on its recovery.” of the same.”

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