Approval of ASPAs seen boosting power reserves of Mindanao
BY LENIE LECTURA – MAY 26, 2021
from Business Mirror
Mindanao is assured of additional power reserves following the Energy Regulatory Commission’s (ERC) approval of Ancillary Services Procurement Agreements (ASPAs) in the first quarter.
“These ASPAs are necessary to support the transmission of power capacity and energy from generation sources to consumption loads. These power reserves ensure and maintain the reliable operation of the transmission system in line with good utility practice and the Philippine Grid Code,” said ERC Chairperson Agnes Devanadera during the Mindanao Power Forum 2021 held Tuesday.
Ancillary service is being provided by qualified power generating plants and procured, managed by the system operator, National Grid Corporation of the Philippines (NGCP). The ASPAs are only effective once approved by the ERC.
According to the NGCP, the primary function of ancillary service is to maintain the load-generation balance of the system. It is basically a support service to sustain the transmission capacity and energy that are essential in maintaining the power quality, reliability, and security of the transmission grid.
Based on ERC data, these ancillary service providers are King Energy Generation Inc., Therma Marine Inc., Western Mindanao Power Corp.
For the upcoming opening of the Wholesale Electricity Spot Market (WESM) in Mindanao—scheduled on June 26—the ERC approved with modification the application of the Philippine Electricity Market Corp. (PEMC) for a new Price Determination Methodology (PDM) for the WESM.
“Our decision was promulgated last December 2020. The said new PDM will also be used for the upcoming commercial operations of the WESM in Mindanao,” said Devanadera.
A key feature of the new PDM is the adoption of the enhanced WESM design and operations which provides a shorter dispatch interval of 5 minutes which will result in better pricing signals, as it instantly reflects the changes in supply and demand.
Projecting possible conditions in the next 5 minutes will result in a more accurate picture of the actual conditions as compared to projecting the possible market conditions in the next one hour.
Since regulating reserves are needed to address the fluctuations in supply and demand, the ERC chair said lesser fluctuation brought about by better projection would mean lesser requirements for regulating reserve. Also, considering that customers pay for the procurement of regulating reserve, this would translate to lower costs for the customers.
The ERC has also directed the Distribution Utilities (DUs) and other WESM participants in Mindanao to participate and comply with all the WESM requirements to ensure the overall readiness of the systems and procedures for the opening and commercial operations of WESM Mindanao.
“The directive was due to the fact that we have noted that there was a delay in the completion of the WESM registration by the participants in Mindanao, despite the mandatory membership which was provided for in the WESM Rules. Thus, we have enjoined the DUs in Mindanao to comply with all the WESM prerequisites, and to strictly observe the Interim Mindanao Dispatch Protocol (IMDP),” she said.
The ERC has called the attention of 30 Mindanao DUs and 23 Embedded Generators to complete their WESM registration and to participate in the Trial Operations Program.
“It is imperative that the WESM registry for Mindanao Trading Participants be completed and the active participation of such trading participants, particularly the DUs, to ensure spot market preparedness and the success of the forthcoming commercial operations of the WESM Mindanao.”
Last April 20, the ERC facilitated a forum with Mindanao DUs to discuss the remaining issues with their respective WESM Registration.
