MINDORO SPOT MARKET. Philippine Electricity Market Corp. chairman Noel Aboboto (4th from left) and Independent Electricity Market Operator of the Philippines president and chief executive officer Richard Nethercott (far right) share how the Mindoro island could benefit from having a Wholesale Electricity Spot Market (WESM) during a discussion with The Association of Mindoreños, Inc. (TAM) members at the Club Filipino in San Juan City on July 23, 2023. Joining Aboboto and Nethercott are TAM adviser and former Labor Commissioner Tito Genilo (from left to right), vice president for Occidental Mindoro Roberto Bleza, Chairman Emeritus Jolly Ting, and president Beng C. Peradilla-Ventura. (PNA photo by Kris Crismundo)
MANILA – Top executives at the Wholesale Electricity Spot Market (WESM) said they aim to operate in Mindoro island this year.
Independent Electricity Market Operator of the Philippines Inc. (IEMOP) president and chief executive officer Richard Nethercott said during a discussion with The Association of Mindoreños, Inc. (TAM) Sunday that the island is a “low-hanging fruit” for WESM operation.
“The WESM will be sooner or later be in Mindoro. That is the reality because the EPIRA (Electric Power Industry Reform Act) calls for one grid for the entire country – one country, one grid, one market,” Nethercott said.
He said the island could roll out the spot market and does not need to wait for the completion of the National Grid Corp. of the Philippines’ (NGCP) submarine cable project connecting Batangas and Mindoro as the island has 14 power generation companies and two electric cooperatives – the Occidental Mindoro Electric Cooperative (OMECO) and Oriental Mindoro Electric Cooperative (ORMECO) – that can participate in the WESM.
According to the independent market operator, the capacity of power generators supplied to the main Mindoro grid reaches 176.1 megawatts (MW) – 81.2 MW sourced from diesel, 54.5 MW from bunker-fired power plant, 24.4 MW from run-of-river hydroelectric facility, and 16 MW from onshore wind – which are enough capacity to trade at the WESM.
The island’s power capacity is almost double the projected peak demand this year at 97.4 MW, Nethercott added.
“We are making this proposal because we believe that the island of Mindoro is ready and WESM is ready. We are confident actually to do and go to Mindoro, to do the market there, because we do not need to invest anything anymore. We have a system ready to accommodate the Mindoro Island,” he said.
Securing reliable supply
The governance arm of WESM, Philippine Electricity Market Corp. (PEMC) chairman Noel Aboboto said the WESM in Mindoro is possible to go online within the year.
“Basically, it is the DOE (Department of Energy) proclamation through a circular that WESM is on already. Before you reach that, there will be a lot of things. For example, there will be mechanism on how to run the market, there’s application for that with ERC (Energy Regulatory Commission). But we will just adopt, of course, what is most likely the current setup and mechanism with the WESM here in Luzon, Visayas, and Mindanao,” he told the Philippine News Agency.
Aboboto said the WESM operation would change the landscape of electricity supply and price in Mindoro, as the spot market offers flexibility in the sourcing of power supply.
Distribution utilities and electric cooperatives, such as OMECO and ORMECO, could source the electricity from power generation companies through power supply agreements (PSAs) and independent power producers (IPPs), which are done through contracts that have fixed prices and periods.
Aboboto said the WESM provides an alternative market, in which power supplies are reliable and prices are market driven.
Unlike the five-minute interval trading in the Luzon spot market, he said, WESM Mindoro is eyed for day-ahead scheduling.
Reducing power costs
In line with the government’s push to bring down power costs in the country, the executives said WESM could also help in bringing down electricity prices in Mindoro island, which currently range from PHP14 to PHP15 per kilowatt hour (kWh).
Nethercott cited that before Mindanao had WESM, the electricity rate on an island was as much as PHP17 per kWh.
Since its operation early this year, the average electricity rates in the Mindanao market were PHP6.21 per kWh in May, PHP3.54 per kWh in June, and PHP3.83 per kWh in July.
“There is so many benefits of WESM that are not being experienced by the people of Mindoro. Why? Because simply, the system is not there. It is ripe,” Nethercott added. (PNA)
