Philippines: Three Fast Facts On DOE Declaring WESM Operation In Mindanao

Philippines: Three Fast Facts On DOE Declaring WESM Operation In Mindanao

The Department of Energy (DOE) issued its draft circular that declared the
start of Wholesale Electricity Spot Market (WESM) operation in Mindanao
starting June 26. DOE said that WESM operation in the region shall enable
the economic distribution of power.

According to the Philippine Energy Regulatory Commission (ERC), the WESM is
a centralized venue for trading electricity as a commodity. It was
formulated by virtue of Section 30 of Republic Act No. 9136, also known as
the Electric Power Industry Reform Act (EPIRA) of 2001.

Here are three fast facts on DOE declaring WESM operation in Mindanao:

1. DOE said there is oversupply of power in Mindanao. A power spot market
can perform scheduling, dispatch and settlement of energy withdrawal and
injections in the Mindanao grid.

"The sooner the WESM in Mindanao is implemented, the better. There are a lot
of new power plants coming in. The new capacity must be dispatched
economically," Business Mirror reported Aboitiz Power Corp. (AboitizPower)
President Antonio Moraza, as saying. He added that establishing WESM in
Mindanao would be beneficial for everyone.

DOE said that the increase of power supply in Mindanao started by the end of
2016 during the entry of excess generation supply. It is expected to grow
further in 2017.

2. DOE said that WESM can ensure stability of power in Mindanao.

DOE added that Mindanao has a peak requirement of 1,300 megawatts (MV) to
1,400MV. Energy Secretary Alfonso G. Cusi said that the region already has
2,800 MW of power supply, and another 1,000 MW more forthcoming up to
late-2017.

"WESM is not yet operational in Mindanao, thus, its generating capacity that
is not yet contracted could end up being stranded. The challenge is how to
optimize these assets so that Mindanao would be assured of stable, reliable
and affordable electricity," Alsons Power Group Vice President for Business
Development Joseph Nocos said.

3. WESM said it is "very much prepared" to comply with the directives of the
DOE.

"In fact, we are just waiting for the DOE's formal announcement," WESM
operator Philippine Electricity Market Corp. (PEMC) President Melinda Ocampo
said. Among other requirements, the PEMC is tasked to conduct trial
operations for Mindanao as well as submit readiness assessment to the DOE at
least 15 days before the launch date.

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Link to Original Article:
http://www.ibtimes.ph/doe-mindanao-wesm-energy-philippines-5880

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com