Enhanced WESM Design and Operations
The Energy Regulatory Commission’s approval of the WESM Price Determination Methodology (PDM) signals the impending transition of WESM to the 5-minute market as well as the implementation of WESM in Mindanao. The launch date for these developments in WESM is now targeted on 26 June 2021.
To date, IEMOP is continuously implementing the Parallel and Trial Operations Program for all market participants. Participants were also enjoined to participate in several activities in order to ensure that the participation criteria are achieved for the declaration of overall market readiness for the enhanced WESM Design and Operations.
To achieve this, several Focus Group Discussions (FGDs) with Market Participants are currently being conducted by the Market Operator to brief them on the timeline, updates, way forward, and their readiness checklist leading to the target Go-Live.
Expansion of RCOA
Pursuant to ERC Resolution No. 12 Series of 2020 which expands the RCOA coverage to end-users with an average monthly peak demand of at least 500 kW in the preceding twelve (12) months, the Market Operator released an advisory to the suppliers regarding the guidelines for the initial switching. It was also noted that starting 26 February 2021, customers under the new threshold can now transact with Retail Electricity Suppliers (RES).
As of 26 January 2021, 10 suppliers have already submitted initial switch requests to IEMOP for a total of 26 contestable customers under the new lower threshold. The list of RES and the contact details of their Regulatory Compliance Officer may be viewed at the ERC website through this link . Information on the retail supply contract parameters for each RES may likewise be viewed at IEMOP’s public website through this link .
Market Operations Highlights
As several categories of community quarantines are implemented in some areas in Luzon and Visayas, market prices continue to drop for the last quarter of 2020 with the Effective Settlement Spot Price (ESSP) for December at 1.96 P/kWh.
The price drop can be attributed to the declining rate of customer transaction as compared to the same period in 2019. Energy consumption for December 2020 also decreased by 2.0% which is equivalent to 126 GWh in comparison to the consumption recorded last December 2019.
Similarly, the decrease in system demand for December is caused by the holiday festivities and the celebration of the Feast of the Immaculate Conception. Although, the Market Operator noted that several instances of high prices were still observed during the month due to several forced and planned outages.
The decreasing temperature in Luzon brought about by the La Niña phenomenon also resulted to a declining peak demand from the period of October up to the present. In comparison to the month of November, the colder weather conditions during December also led to the wind plants’ increasing contribution in the generation mix from 2.1% to 2.6% while hydro plants maintained its generation at around 8.8%. Meanwhile, geothermal and natural gas plants increased its generation from 9.8% to 10.9%, and 21.3% to 23.2%, respectively. Coal plants’ contribution continue to drop from 54.7% to 51.2%.
Overall, the total generation for the year 2020 (79,354 GWh) reduced by 5.5% as compared to 2019 (83,982 GWh). Similar with the previous years, coal and natural gas plants accounted for more than three-fourths of the generation mix.
In the said briefing, the Market Operator also discussed their market projections for the coming months to provide insights to what the demand and prices may look like under several scenarios.
