PEMC heeds DOE call to fast-track Electricity Reserve Market

The Philippine Electricity Market Corporation (PEMC) assures the Department of Energy (DOE) of its commitment to ensure that the full commercial operations of the co-optimized Energy and Reserve Market will be realized soon.

The DOE intended a co-optimized energy and reserve when it issued the Department Circular (DC) No. DC2015-10-0015 to implement the enhanced WESM design and operations.

To complete the implementation of the enhanced WESM design, the DOE then issued DC No. DC2019-12-0018 to establish the general framework governing the provision and utilization of Ancillary Services (AS) in the grid, and DC No. DC2021-03-0009 which provided further policies to supplement the DC2019-12-0018 and adopted a general framework governing the operationalization of the Reserve Market.

Under these Department Circulars, PEMC, as the Governance Arm, is tasked to determine the readiness of the Reserve Market based on the six (6) readiness criteria and shall thereafter issue a certification of readiness subject to assessment and final confirmation by the DOE.

“PEMC is tasked to determine the readiness of the co-optimized Energy and Reserve Market based on the six (6) criteria. This involves readiness not only of the stakeholders from the generation sector but all responsible entities such as the Energy Regulatory Commission, the Market Operator and the System Operator.” according to PEMC President, Elvin Hayes Nidea.

The 6 criteria are as follows:

• Approval of Price Determination Methodology (PDM) by the Energy Regulatory Commission (ERC) for an enhanced WESM incorporating a reserve pricing mechanism;
• A successful completion of AS capability testing for all generating facilities, certifying them as Providers;
• All systems and procedures including all interfaces necessary to implement the co-optimized Energy and Reserve Market are in place;
• Establishment of measures including, but not limited to, reserve offer price cap and floor, and secondary price cap;
• Schedule, dispatch, bill and settlement procedures relative to energy and reserves co-optimization are fully operational, and incorporated in Market Rules and Manuals; and
• Successful trial operations ensuring readiness of AS Providers to participate in the co-optimized Energy and Reserve Market.

In response to this, President Nidea said: “Our commitment to fulfill PEMC’s responsibility to facilitate the readiness certification for the full commercial operations of the co-optimized Energy and Reserve Market have remained steadfast”. Once full commercial operations start, PEMC’s governance responsibility involves assessment and monitoring of the co-optimized market to ensure it delivers the commitment and intent of the enhanced WESM design which will eventually benefit the end consumers.

Partial operations of the co-optimized Energy and Reserve Market started on 26 December 2023 based on the advisory of the DOE issued on 22 December 2023. The full commercial operations will immediately commence after all the six (6) criteria are met and on the date that will be determined by the DOE.