Mindanao residents and businesses can expect more reasonable electricity prices and stable supply which could help prop up investments and economic activity in the country’s southern island following the launch of the Wholesale Electricity Spot Market (WESM) led by President Ferdinand Marcos Jr. yesterday.
The President, at ceremonies for the launch of the WESM Mindanao held in Malacañang yesterday, said the event is a very important step in rationalizing the nation’s power capacity and distribution and “hopefully with an eye also to the lowering prices of fuel in the world market, that this will lead to lower cost not only for our industrial partners but also for our household consumers.”
Marcos said he expects in the long run, WESM will help in sustaining power generation investments to meet the ever-growing electricity demand not just in Mindanao but eventually the whole country.
Pursuant to Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, the WESM was created as a centralized venue for trading electricity for large-scale buyers and sellers, and where prices are based on actual use and availability.
WESM was established as a competitive, efficient, transparent and reliable market for electricity. It began commercial operations in Luzon in June 2006 and the Visayas in December 2010.
The President said with the establishment of WESM in Mindanao and the integration of the three main grids, the country can hopefully achieve its goal of having a “joint WESM for the entire nation and of attaining total capacity for the Philippines’ power demands”.
“The presence of WESM in Mindanao and an interconnected and interdependent grid in the country will not only ensure a level playing field in the competitive energy market but will also provide assurance to investors,” said Marcos.
He said WESM in Mindanao will also be crucial in paving the way for efficient transmission and settlement of electricity exchanges under the Mindanao-Visayas Interconnection Project.
Mindanao has an electrification rate of 87 percent and at present has a 4,321 megawatts registered capacity. Its peak demand is only at around 2,167 megawatts.
The President said with the establishment of WESM in Mindanao, around 2,000 megawatts of uncontracted capacities can now be sold in the WESM and be dispatched at any given time, providing supply to distribution utilities, electric cooperatives and other end-users when their contracted power plants are not available.
Energy Secretary Raphael Lotilla, in an interview after the event, said the establishment of the power spot market “translates into more reasonable prices, especially for Mindanao right now.”
Lotilla said it could also mean an additional power supply to the rest of the country once the interconnection is established
“This means a lot for the people of Mindanao because now there is a spot market where the excess capacity in Mindanao plants can be sold, and so they can source part of their supply from this excess capacity,” he said.
The Department of Energy said WESM in Mindanao will enable uncontracted power plants to sell electricity, prepare for import and export of electricity, improve the reliability of supply in the main grid, ensure a level playing field, and facilitate the implementation of policy mechanisms currently available only to the Luzon and Visayas grids.
