The Wholesale Electricity Spot Market (WESM) has joined the league of “technologically advanced markets” as it could now determine power prices based on five-minute intervals instead of a per hour basis.
The Independent Electricity Market Operator (Iemop) said the shift to a five-minute dispatch and settlement interval at the stroke of midnight of June 26 would help significantly improve the demand forecast and eliminate generation imbalances that could happen in a one-hour trading interval.
Efficiencies gained from this transition are expected to eventually benefit Filipino consumers through more competitive electricity prices.In approving the implementation of this new price determination method in January, the Energy Regulatory Commission (ERC) believed “it will instantly reflect the changes in supply and demand.”
The ERC said projecting possible conditions in the next five minutes would result in a more accurate picture of how the market was behaving.
“[The new price interval] would make the grid more secure through the reduced system imbalance while, at the same time, generator trading participants would be able to easily comply with their target schedule,” Iemop said.
Further, customer-trading participants, such as distribution utilities, bulk users and retail electricity suppliers, would now have a more refined period for their bilateral contracts.Iemop said this would enable WESM participants to have a better option on having their electricity supplied either through their bilateral contracts or through the electricity spot market.
“This milestone of an enhanced WESM design and operations, much like the transition of WESM operations to an independent market operator, was initially conceived way back in 2013, [and] aims to further enhance competition, transparency and robustness of the Philippine WESM, which can then lead to more investments in the Philippine power industry,” Iemop said.
Iemop took over the operations of WESM in September 2018 and relieved the government’s Philippine Electricity Market Corp. (PEMC) of its active role in running the trading platform. However, PEMC retains its governance role of the WESM. INQ