WESM in Mindanao to start operations this month–DOE

The Department of Energy (DOE) has finally declared the start of the commercial operations of the wholesale electricity spot market (WESM) in Mindanao more than 5 years after it was launched.

“The DOE hereby declares January 26, 2023 as the COD [commercial operations date] of the WESM in Mindanao. For this purpose, the scheduling and dispatch of capacities in Mindanao shall be based on the schedules generated by the IMO [Independent Market Operator] in accordance with the WESM rules and the relevant market manuals, and as otherwise provided herein,” DOE Circular No. 2022-12-0039 stated.

Energy Secretary Raphael Lotilla signed the circular on December 23, 2022. It was made public over the weekend.

The DOE earlier published a draft department circular proposing to declare the commercial operations of the WESM in Mindanao on December 26, 2021. It did not push through, and the launch date was previously moved to June last year, which also did not happen.

One of the reasons cited was the Mindanao-Visayas Interconnection (MVIP) project that has yet to be completed.

The same DOE circular indicated that the P52-billion interconnection project is expected to be completed by March. The agency stressed that the commercial operation of the project necessitates the implementation of WESM in Mindanao to allow the efficient transfer and settlement of electricity exchanges through the Mindanao-Visayas Interconnection.

Through the MVIP, the Mindanao grid will be linked to the Visayas grid via an HVDC system with a 450-megawatt initial capacity.

“The commercial operation of WESM Mindanao and the MVIP is expected to improve the reliability of electric power supply not only in the Mindanao grid but also in the Luzon and Visayas Grids,” the DOE said.

As of November last year, there were 69 out of the 100 expected participants in Mindanao that have completed registration in the WESM. The DOE said the remaining requirements of the unregistered participants would not impede the commercial operations of the WESM in Mindanao. The agency has given them until January 15 to be registered.

The WESM is the country’s trading floor of electricity. It is a centralized venue for buyers and sellers to trade electricity as a commodity, where prices are based on actual demand and supply. Through it, power generation companies can sell their excess capacities not covered by contracts, while customers can also buy additional capacities on top of their contracts.

WESM started commercial operations in the Luzon grid in June 2006 and in December 2010 in the Visayas grid.


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