DOE to resume electricity reserve market this month

By Francis Allan L. Angelo

The Department of Energy (DOE) has directed the Independent Electricity Market Operator of the Philippines (IEMOP) to collaborate with the Energy Regulatory Commission (ERC) and the National Grid Corporation of the Philippines (NGCP) to implement necessary adjustments for the resumption of the Wholesale Electricity Spot Market (WESM) reserve market, targeted for early this month.

Key adjustments involve aligning the reserve market’s 1-hour dispatch interval with the energy market’s 5-minute trading interval to optimize both energy and reserves effectively.

The plan follows the ERC’s Notice of Resolution in Case No. 2023-02 RC, issued on July 26, 2024, which requires energy scheduling in 5-minute dispatch intervals.

Consequently, reserve scheduling must match this interval for effective co-optimization.

The DOE has also mandated the Market Operator (MO) to submit pertinent guidelines for DOE approval, ensuring compliance with the ERC’s conditions outlined in the Price Determination Methodology (PDM).

“The ERC’s action to lift the suspension of Section 8 of the billing and settlement of the PDM will lead to the resumption of the reserve market, which is eagerly awaited by both the power sector industry and the DOE,” said Energy Undersecretary Rowena Cristina Guevara.

“Coordination among the DOE, ERC, MO, and SO is crucial for the necessary adjustments to the WESM systems and processes to ensure the smooth implementation of the reserve market.”

Undersecretary Guevara emphasized the importance of this move, saying, “We aim for all generating capacities to operate and sell in the WESM to enhance grid reliability, minimizing potential yellow and red alerts, and avoiding issues like those encountered during the reserve market’s trial operations in March. We call on the support and cooperation of the electric power industry participants towards this end.”

The DOE is set to issue an official advisory to resume the reserve market by August 5, 2024, once the MO submits the required guidelines.

The ERC’s recent Notice of Resolution lifting the suspension on the implementation of Section 8 of the PDM facilitates the full operation of trading reserves in the WESM for both contracted and merchant plants, potentially augmenting available capacity.