PEMC says reserve market boosts grid reliability one year on

A year after the Reserve Market resumed commercial operations in August 2024, the Philippine Electricity Market Corp. (PEMC) reported that the country’s power grid achieved major stability gains.

The Reserve Market has proven to be a key mechanism for ensuring nationwide reliability by enabling the procurement of essential ancillary services across the Luzon, Visayas, and Mindanao grids.

PEMC’s Enforcement and Compliance Office said grid security improved by 98.39% as Red and Yellow Alerts sharply declined, compared with multiple alerts during the suspension period.

Officials attributed the improvement to stronger fulfillment of reserve requirements and higher compliance among ancillary services providers.

Grid Security Dramatically Improves

The most striking indicator of success has been the dramatic reduction in Red and Yellow Grid Alerts. From August 2024 to July 2025, only one (1) Yellow Alert was recorded across the entire grid system, which occurred in Luzon in March 2025. This represents a significant improvement compared to the April to July 2024 suspension period, when multiple Red and Yellow Alerts were declared across the grid.

Regional Growth in Reserve Capacity

Reserve Market participation has increased across all major regions, with registered reserve capacities expanding significantly with Mindanao focused on restructuring with strategic capacity adjustments.

Reserve Market participation has also expanded, with registered reserve capacity increasing across all regions.

In Luzon, registered reserve capacity grew from 6,754 megawatts in August 2024 to 7,190.4 MW in July 2025, a 20.27% increase.

In the Visayas, reserves rose from 813.5 MW to 861.7 MW, up 27.47%.

The Department of Energy’s policy to promote generator facility certification for ancillary services and encourage participation in the Reserve Market drove this growth.

The Reserve Market also enabled flexible procurement of ancillary services through spot transactions, which averaged 32.23% of scheduled reserves in Luzon, 61.46% in the Visayas, and 11.47% in Mindanao.

This system complements existing Ancillary Services Procurement Agreements to ensure full reserve coverage.

PEMC said its compliance monitoring revealed fewer violations under the Reserve Conformance Standards and Reserve Offered Capacity Compliance, showing a stronger compliance culture among providers.

The RCS assesses the accuracy, timeliness, and sustainability of ancillary services delivered by scheduled facilities, while the ROCC checks compliance with reserve offer submissions regardless of existing contracts.

Financial accountability measures remain in effect, with confirmed breaches resulting in non-payment of Reserve Trading Amounts and penalties redistributed to end users under approved guidelines.

A penalty relaxation period from August 2024 to February 2025 eased the transition under the Ancillary Services Monitoring Manual’s Transitory Provision.

With steady reserve fulfillment and stronger adherence to compliance standards, PEMC said the power grid is positioned for continued reliability gains.

The Reserve Market works alongside existing contracting mechanisms to secure adequate contingency, regulating, and dispatchable reserves, supporting the country’s rising energy demand while maintaining stability.