Energy reserve market opening in June awaits ERC approval

A Reserve Market, which will help ensure a stable power supply for consumers by storing and trading ancillary reserves, is expected to be commercially available by June once the Energy Regulatory Commission greenlights its operations.

“The DOE (Department of Energy) targets to pursue the commercial operations of the Reserve Market in June. This means that the ERC has to approve the PDM (price determination methodology),” Engr. Robinson P. Descanzo, Chief Operating Officer of the Independent Electricity Market Operator of the Philippines, told reporters on Thursday.

Descanzo said the PDM will govern how power supply will be traded in the Reserve Market.

In a text message to the Daily Tribune, ERC chairperson Atty. Monalisa Dimalanta confirmed that the state-run power regulator also hopes to launch the Reserve Market by the middle of the year.

“That’s our working target, but it will depend on the progress of hearings once they begin. We have yet to deliberate on the PDM since the hearings have not yet started,” Dimalanta said.

The ERC is set to conduct a hearing in Cebu on 16 March, Davao on 23 March, and Manila by the end of March to early April.

The results of the hearing will be used by the ERC to deliberate on the pricing scheme.

The Reserve Market design approved by the DOE through its Department Circular DC2019-12-0018 and DC2021-03-0009 allows reserve capacities to be traded in the Wholesale Electricity Spot Market.

Once the new market is running, reserves will also be scheduled on the least-cost basis through a more competitive and transparent landscape.

IEMOP Head of the Corporate Strategy and Communications Department Isidro Cacho also noted that pursuing a Reserve Market is among the strategies being explored to provide consumers with uninterrupted power supply, even during peak seasons.

“It’s just waiting for approval from the ERC. And based on the policy released by the DoE, the NGCP (National Grid Corporation of the Philippines) will be the single buyer,” Cacho added.

The NGCP, which holds a 25-year franchise to solely operate the power transmission assets of the government, is mandated to secure power reserves for contingency.

The IEMOP, meanwhile, is actively coordinating with the DoE and the ERC to help stabilize electricity prices in the market.


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