Spot market power prices decline in June

THE AVERAGE price for power on the wholesale electricity spot market (WESM) was P6.53 per kilowatt hour in June, down from P7.66 in May, the Independent Electricity Market Operator of the Philippines (IEMOP) said Wednesday.

In a virtual briefing, IEMOP Manager for Pricing Validation and Analysis John Paul S. Grayda said that the secondary price cap (SPC) was implemented during 103 trading intervals from the start of the month until June 20.

The SPC is a price mitigating mechanism designed to limit high prices in the spot market. Mr. Grayda said that the IEMOP “imposes the cap when it observes sustained high prices for the past five days.”

He said that the IEMOP started implementing the price cap last month.

“There are frequent high prices particularly at the start of May billing, triggering the SPC. On May 31 and June, (the Luzon grid) had yellow and red alerts so the system operator (National Grid Corp. of the Philippines) declared a market intervention as the grid experienced manual load dropping due to generation deficiencies,” Mr. Grayda said.

In May, the IEMOP imposed the SPC during 55 trading intervals.

Earlier this month, the grid operator placed the Luzon grid under red alert for three consecutive days due to thinning reserves, plant shutdowns and higher temperatures. Portions of Luzon experienced rotating brownouts during this time.

On Wednesday, the market operator also announced that it is ready to launch its enhanced WESM design and operations (EWDO) in Luzon and the Visayas by June 26.

The EWDO seeks reduce the time between scheduling and dispatch of power.

“We will be implementing the commercial operations which means that all five-minute dispatch schedules… shall be implemented from June 26, 2021 effectively at 12:05 in the morning,” IEMOP Manager of Operations Planning and Modeling Edward I. Olmedo said during the briefing.

He added that Luzon and the Visayas will undergo “relaxed dispatch operations” for up to three months where the market operator will observe the participants but will “not be very strict” about compliance during the period as long as they can provide valid reasons.

Mr. Olmedo said that Mindanao-based participants still had to complete their registration for the planned power spot market there, with the IEMOP allowing for a one-month extension.

“We are opting to start already — upon approval by the DoE — what we call WESM central scheduling. Now, this will only involve central scheduling (of) all contracted capacities in Mindanao but there will be no WESM settlement, WESM or spot market transactions,” he said. — Angelica Y. Yang

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