Launch of WESM in Mindanao to push through

MANILA, Philippines — The launch of the wholesale electricity spot market (WESM) in Mindanao will push through despite the delay in the completion of the Mindanao-Visayas Interconnection Project (MVIP).

The Independent Electricity Market Operator of the Philippines (IEMOP) will proceed with the implementation of WESM Mindanao on June 26, according to IEMOP COO Robin Descanzo.

“The feasibility of starting up the market in Mindanao is not really hinged or tied with the interconnection,” he said. “Even stand alone, the market in Mindanao can be operated.”

Descanzo said the IEMOP sought DOE’s policy on the launch of WESM Mindanao.

“The indication we got from the DOE is to pursue the market in Mindanao even with the delayed interconnection  of Visayas and Mindanao,” he said.

Last month, the National Grid Corp. of the Philippines (NGCP) announced that the MVIP may not be completed on the adjusted December 2021 target completion because of the damage of several portions of its fiber optic cable connection.

The grid operator said the repair of the severed portions would require another round of procurement, awarding, scheduling of cable laying, all of which are also affected by prevailing quarantine restrictions in terms of cable shipping and availability of foreign experts.

Moreover, the actual cable laying is also subject to weather and tide conditions.

The MVIP, certified as an Energy Project of National Significance in 2018, was initially targeted for completion by December 2020, but was extended to December 2021 due to the COVID-19 pandemic and subsequent quarantine restrictions across the country.

Earlier, IEMOP said it would complete the submission of requirements to the Energy Regulatory Commission (ERC), the software enhancement audit and the implementation of final configurations to the new system within the first quarter.

It will then submit readiness assessment to the DOE, which will affirm IEMOP’s readiness to launch the market.

So far, the market operator is seeing a higher level of participation from Mindanao power players.

Out of the 87 total participants, 18 have completed their registration with market operator, while others are in the process of completing their requirements.

Established under the Electric Power Industry Reform Act (EPIRA) of 2001, WESM serves as the country’s electricity trading market.

Mindanao was not part of the WESM and its power grid is not connected to the national grid.

Instead, an Interim Mindanao Electricity Market (IMEM) was set up on Sept. 26, 2013 and started full commercial operations on Nov. 26, 2013 as a trading floor for electricity in the region.

However, this was suspended in February 2014 following a grid-wide power interruption in the region, preventing power companies with excess generating capacity to offer their output to distribution utilities (DUs).

Apart from instances of power interruptions during its operations, PEMC also faced the difficulty of getting payments from DUs for the capacity bought in IMEM.

The push to establish WESM Mindanao was then revived and was targeted to start in October 2018, but was deferred multiple times – on June 26, 2019 and then on Jan. 26, 2020 – due to the ongoing software audit being done on the NMMS to be used for the regional WESM.