DOE announces full commercial operations of the Reserve Market

All power generation companies with generating capacity/units capable of providing ancillary services (AS) may now offer and sell AS even without an Ancillary Service Procurement Agreement (ASPA) with the National Grid Corporation of the Philippines (NGCP) following the full commercial operations of the Reserve Market on 26 January 2024, the Department of Energy (DOE) announces.

Reserves, commonly referred to as AS, are services needed to maintain balance in the power system to ensure normal frequency and voltage levels in response to demand changes, variability of renewable energy, and possible loss of a large generating unit.

Integrated into the Wholesale Electricity Spot Market (WESM), the Reserve Market aims to co-optimize energy and reserves, which may result in optimal schedules and prices for energy and reserve requirements, fostering competition and affordability while ensuring grid security and reliability.

“The full commercial operations of the Reserve Market today is a significant step forward for the energy sector. This will bring efficient dispatch of all available capacities by co-optimizing the capacity and price offers for energy and reserve to ensure that the required levels for both services are always met,” Energy Secretary Raphael P.M. Lotilla said.

The Secretary added that this development will enable the NGCP, as the country’s System Operator and sole buyer of reserves, to fully comply with its mandate of ensuring that sufficient levels of reserves are available at all times and can be immediately dispatched whenever needed.

To ensure that the WESM co-optimizing energy and reserves will maintain and enhance a competitive environment where transparency and accountability prevail, the DOE, in coordination with the Energy Regulatory Commission (ERC), Philippine Electricity Spot Market Corporation (PEMC), Independent Electricity Market Operator of the Philippines IEMOP), NGCP and other relevant stakeholders will closely monitor the operations of the energy and reserves market.