PEMC launches trial operations of Mindanao power spot market

By Lenie Lectura – June 28, 2017

from Business Mirror

A total of 41 firms participated in the trial operations for a spot market in Mindanao, the Philippine Electricity Market Corp. (PEMC) said on Wednesday.

The trial operations of the Wholesale Electricity Spot (WESM) in Mindanao is expected to last for three months. The success of the trial operations is key to pursuing a commercial launch of the program.

“PEMC, as the designated market operator, is committed in ensuring the readiness of the personnel and interfaces of our Mindanao participants to ensure a functional electricity market working in raising the competition and transparency in the power industry,” PEMC President Melinda L. Ocampo said.

The WESM participants include the National Grid Corp. of the Philippines  as the system operator and metering services provider, generation companies, distribution utilities and grid-connected customers. They are involved in the conduct of end-to-end testing of all interfaces and systems that include simulations of all processes, such as registration, bid submission, pricing and scheduling, and settlement.

PEMC said the trial operations program signals the start of implementing test cases of a market-based mechanism for the efficient scheduling, dispatch and settlement of energy withdrawal and injections in the Mindanao grid brought about by excess generation supply starting in 2016 with the entry of 748 megawatts (MW) of new generation capacity, which is expected to increase further by 1,260 MW until 2018.

The integration of Mindanao to the WESM would cover, among others, the following: application of the Energy Regulatory Corp.-approved price determination methodology (PDM) for pricing and settlement of electricity transactions in the Mindanao grid; utilization of the market management system (MMS) for the determination of dispatch schedules in the Mindanao grid; provision of access to Mindanao generators and customers to the MMS for the submission of bids, offers and self-schedules, and other trading functions; real-time publication of wholesale prices for electricity in the Mindanao grid in the public web site; and eligibility of Mindanao stakeholders for membership in the Philippine Electricity Market Board and its various committees.

Coinciding with the onset of the Mindanao trial operations program is the initiation of the live parallel operations of the new market management system (NMMS), in the Luzon and Visayas grids. The live parallel operations is a milestone in the implementation of the enhanced WESM design via the NMMS enabling the market operator, the system operator, trading participants and other service providers to operate under a live market environment of the NMMS in parallel with the existing market management system until the transition to commercial operations, or “Go Live”, of the NMMS. The results of the NMMS will not be used in the billing and settlements processes of actual transactions, hence, will not be financially binding.

Ocampo said the live parallel operation is a transition phase that comes after the trial operations stage,  which commenced on  March 26 and prior to the Go Live. During this period, the NMMS is subjected to actual inputs with the goal of evaluating the resulting prices and schedules, and assessing the NMMS’ performance in a real-time environment. It shall also gauge the readiness of the interfaces of the trading participants and the system operator in this real-time environment.