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‘Power reserves market to launch in 2022’

Photo from www.iemop.ph

THE target date for the trading of power reserves in the spot market would be moved to 2022, the Independent Electricity Market Operator of the Philippines (IEMOP) said over the weekend.

“We’re [will] implement that next year [2022]. We have filed already the rules with regard to the reserve market with the RCC (Rules Change Committee). On the market operator side, we’ve done several activities with regard to the implementation of the reserve market,” said IEMOP spokesperson Andrea Mae Caguete during a virtual news briefing last week.

IEMOP is the operator of WESM, the country’s trading floor of electricity.

The WESM rules need to be amended to integrate the reserves market, said Valfia Uy-Gregorio, senior specialist from the Market Design and Business Development Division of IEMOP.

“We’ve filed amendments to the WESM rules and related market manual. It will undergo the normal process of rules change process to the ERC [Energy Regulatory Commission], PEM [Philippine Electricity Market] Board, DOE [Department of Energy].

The PDM (Price Determination Methodology) will require approval from the ERC, upon its approval of the implementation of the reserves market. We’re looking at its implementation in 2022,” said Gregorio.

DOE Assistant Secretary Redentor Delola said last May that the agency’s target is to start the commercial operations of the reserves market by the end of this year.

The power reserves to be traded include the regulating, contingency and dispatchable. Once in place, the National Grid Corporation of the Philippines (NGCP) can already purchase this anytime it needs to in to prevent sudden power outages. It would also encourage investors to put up facilities that will cater to the reserve market.

IEMOP officials also said WESM in Mindanao must take place before the reserves market. Caguete said, “WESM Mindanao is being targeted within the fourth quarter of 2021.”

Meanwhile, IEMOP reported that WESM prices continue to drop this month as colder weather slashed demand for power.

As the August billing settles at an average price of P4.76 per kilowatt hour (kWh), IEMOP foresees prices to drop further this month with the first half of September averaging only P3.10/kWh. The price drop is attributed to ample supply, mostly from coal power plants, and a decrease in demand from 10,111 megawatts (MW) last August to 9,824 MW in September, or by 2.83 percent.

IEMOP carries out the mandate to pursue the WESM objective to have a transparent, fair, competitive, and reliable market for the trading of electricity throughout the Philippines.

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