The Department of Energy (DOE) has instructed the Independent Electricity Market Operator of the Philippines (IEMOP) as Market Operator (MO) to coordinate with the Energy Regulatory Commission (ERC) and the National Grid Corporation of the Philippines (NGCP) as System Operator (SO) to undertake the necessary adjustments to the Wholesale Electricity Spot Market (WESM) systems and processes for the resumption of the reserve market targeted early this month.

In particular, adjustments are needed to align the reserve market’s 1-hour dispatch interval with the energy market’s 5-minute trading interval to fully realize the benefits of co-optimizing energy and reserves. Based on the ERC’s Notice of Resolution in Case No. 2023-02 RC dated 26 July 2024, since energy is already scheduled in 5-minute dispatch intervals, reserve must also be scheduled in the same time interval for co-optimization to work.

The MO has also been instructed to submit relevant guidelines to the DOE, for its approval, to adjust with the conditions set by the ERC in the Price Determination Methodology (PDM) outlined in said Resolution.

"The ERC's action to lift the suspension of Section 8 of the billing and settlement of the PDM will lead to the resumption of the reserve market which is eagerly awaited by both the power sector industry and the DOE. Coordination among the DOE, ERC, MO and SO are therefore crucial for the necessary adjustments to the WESM systems and processes to ensure the smooth implementation of the reserve market,” Energy Undersecretary Rowena Cristina Guevara said.

“We aim for all generating capacities to operate and sell in the WESM to enhance grid reliability, minimizing potential yellow and red alerts, to avoid what occurred when the reserve market returned to trial operations in March of this year. We call on the support and cooperation of the electric power industry participants towards this end,” Undersecretary Guevara added.

Once the MO submits the guidelines, the DOE will issue an official Advisory to resume the reserve market by 05 August 2024.

The ERC issued a Notice of Resolution in ERC Case No. 2023-002 RC, lifting the suspension on the implementation of Section 8 on Billing and Settlement of the PDM in the co-optimized energy and reserve in the WESM. This decision paved the way for the full operations of trading reserves in the WESM for both contracted and merchant plants, which is expected to augment available capacity. ###