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New WESM design to improve market trading efficiencies

The new design of the trading platform of the Wholesale Electricity Spot Market (WESM) will expectedly improve efficiencies in the buying and selling of power commodity and will similarly bring the maturity of the deregulated electricity sector to higher notches.

One of the key features of the WESM’s new market management system (NMMS) will be the shortened dispatch interval – that was originally from one hour to just five minutes, parallel to practice in more mature jurisdictions, such as Australia.

With that, WESM operator Philippine Electricity Market Corporation (PEMC) noted that inter-hour deviations and imbalances in power trading would be lessened.

Additionally, the system improvement calls for a “single pricing mechanism as a result of the shortened dispatch interval that will no longer require ex-post runs.” Prior to the changes, WESM pricing had been anchored both on ex-ante (based on forecast) and ex-post (actual outcome) pricing schemes.

PEMC added that there would also be “automatic pricing re-runs that will yield to availability of prices in real-time.”

For gate closure on price and volume offers, this shall also be reduced from one hour to just 30 minutes or less, purportedly to provide trading participants flexibility in managing risks for unplanned events.

And with the planned setting up of the reserve or ancillary services market, co-optimization of resources will be pursued, along with that of energy offers.

The live run on the new trading platform is expected around June next year, the timeline set by German firm Siemens, the contractor of PEMC for the project.

PEMC President Melinda L. Ocampo said these trading platform reinforcements in the WESM design and operations were based on a study previously commissioned by the Department of Energy.