IEMOP plans to establish reserves market

THE Independent Electricity Market Operator of the Philippines (IEMOP) said it is looking at establishing a market for ancillary services (AS) to attract investment and ensure transparency in the system.

IEMOP Spokesperson Andrea May T. Caguete said that the planned reserves market aims to encourage investors to build facilities which address AS requirements, adding that phase one of the project is scheduled to be implemented this year.

“If we implement a reserve market, our generating (companies) will be incentivized to put up facilities in order to cater to our AS requirement,” Ms. Caguete said during a virtual briefing Monday.

Once in place, the market will help encourage more competition, she added.

IEMOP Head of Corporate Strategy and Communications Isidro E. Cacho, Jr. said such a market “can provide some transparency.”

“Right now, all the reserves are contracted under firm or non-firm (arrangements). We don’t have any information on that,” he said, noting that the presence of the market can shed more light on the contracting of reserves.

Mr. Cacho said that the IEMOP is working on a price determination method covering the pricing and cost recovery aspects of the reserves market. He added that IEMOP is proposing a single-buyer mechanism, with the grid operator in charge of procuring the reserves instead of an energy market made up of buyers and sellers.

“If the reserves market is in place and if the system lacks reserves, the (electricity) spot market can augment the supply required under the Philippine Grid Code,” he added.

During the briefing, IEMOP also gave updates on its limited live dispatch operations (LLDO), the completion of which brought it closer to its goal of launching the enhanced wholesale electricity spot market design and operations (EWDO).

EWDO seeks to implement various rule changes to the WESM, which will reduce the time between scheduling and dispatch of power, among others.

“We proceeded with the execution of the LLDO on May 29 and it lasted for a week until June 4, 2021… (During the) LLDO, we asked generators to implement their five-minute dispatch schedules,” IEMOP Manager of Operations Planning and Modeling Edward I. Olmedo said.

He added that IEMOP has submitted its LLDO report to the Department of Energy and is currently waiting for the department to clear the EWDO for live operations this month. — Angelica Y. Yang

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