Paving the way for a progressive market, the Independent Electricity Market Operator of the Philippines (IEMOP) conducted its second Market Participants’ Update (MPU) for the year in fulfilment of its mission of providing sustainable and innovative market solutions and services to its stakeholders and participants.
Similar to its previous MPU and other engagements, the event was conducted online in compliance with the health protocols being implemented to minimize the spread of the COVID-19 virus.
With the theme “Future of the Market”, the participants were apprised of the Market Performance under the general community quarantine and IEMOPs initiatives in shaping the future of the market.
“To date, IEMOP remains involved in the implementation of new policies and regulations as well as in the development of new market mechanisms to foster a more dynamic power market for our participants,” IEMOP President and Chief Executive Officer Richard Nethercott emphasized.
Likewise, the event was attended by Assistant Secretary Redentor E. Delola of the Department of Energy who addressed the participants regarding the milestones and anticipated activities within the energy industry.
Market Operations Highlights
The presentations started with the updates on the market operations highlights which reported generation capacity of around 17,208MW in Luzon and approximately 3,665MW in Visayas. Coal power plants continue to dominate the generation mix with 43% of the total registered capacity versus the remaining sources namely natural gas, hydro, oil-based, geothermal, solar, biomass, wind, and energy storage. The effective settlement spot price (ESSP) for October 2020 is 2,066.74 Php/MWh with 12% of the total energy traded sourced from the market.
IEMOP also noted the on-going development for the interfacing of IEMOP’s Central Registration and Settlement System (CRSS) with the Energy Virtual One-Stop Shop (EVOSS) system. The EVOSS system (https://www.evoss.ph/) under the Department of Energy, which went operational last 24 July 2020, refers to an online system that allows the coordinated submission and synchronous processing of all required data and information, and provides a single decision-making portal for actions on applications for permits and/or certifications necessary for, or related to, an application of a proponent for new power generation, transmission, or distribution projects.
IEMOP is guided by the advisories issued by the DOE and ERC on the implementation of Republic Act No. 11494 or the Bayanihan to Recover as One Act regarding payment extension timelines. By way of compliance with DOE Advisory dated 23 September 2020 and ERC Advisory dated 29 October 2020, IEMOP issued its own advisory on 3 November 2020 providing the guidelines in relation to WESM settlements.
RCOA LOWER CONTESTABILITY THRESHOLD IMPLEMENTATION AND OTHER MARKET DEVELOPMENTS
IEMOP also appraised the participants on the latest development on Retail Competition and Open Access (RCOA).
In October 2020, ERC released a draft resolution prescribing the timeline for the implementation of retail competition and open access. Under the draft resolution, the contestability threshold will be reduced to 500 kW on 26 February 2021. This will be followed by reduction to 100 kW on 26 January 2022, which will also mark the start of retail aggregation. Finally, the draft ERC resolution provides for the implementation of RCOA at the household level on 26 January 2023. A 10 kW threshold, however, is provided in the draft ERC resolution for household-level implementation.
In anticipation of the lowering of contestability threshold, IEMOP has submitted a proposal in 2018 which introduces changes to retail market processes that would enable the Central Registration Body to better handle the significant volume of retail transactions.
Under IEMOP’s 2018 proposal, WESM registration of contestable customers will be optional for those that would opt to purchase part of their requirements directly from the spot market as Direct WESM Members. This set-up is also proposed in cases when the contestability threshold is reduced further given the significant volume of retail transaction. Currently, all contestable customers are required to register in the WESM, most of which are Indirect WESM Members.
In terms of metering, the Retail Rules require interval metering at 5-minute resolution. This requirement is proposed to be relaxed to any metering interval (i.e. 1-hour, 30-minutes, 15-minutes). To minimize the cost of participating in the retail market, use of existing non-interval meters is also proposed when the threshold is reduced further. In these cases, profiling is proposed to be performed by the Central Registration Body to convert the submitted metering data to 5-minute data for WESM settlement.
With the increasing number of contestable customers and to reduce requirements for RCOA participation, IEMOP further proposed in 2018 to streamline the documentary requirements for switching.
IEMOP is currently performing studies to develop detailed proposals for lower threshold implementation. For the 4th quarter of 2020, IEMOP targets to complete studies on the overall CRB implementation framework, profiling of non-interval meters, and retail aggregation.
Finally, the roster of presentations also includes discussion on the impending commercial launch of the Enhanced WESM Design and Operations (EWDO) which was set to change the landscape of the Philippine Electricity Trading. IEMOP noted that its Market Systems are ready for the implementation of the EWDO. Anent other criteria for EWDO’s commercial launch, IEMOP is continuously working with stakeholders and participants in achieving necessary regulatory and policy approvals as well as the overall market readiness.
“We endeavor to retain our very satisfactory rating based on the PEMC Market Operator Performance Status Report and continuously improve our processes to give participants the service they deserve,” IEMOP’s Chief Operating Officer and Acting Trading Head Robinson Descanzo said.
Together with the participants and stakeholders, IEMOP looks forward to powering a brighter future for the energy market which shall in turn, contribute to the overall growth and progress of the nation.
