February 2, 2023

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WESM in Mindanao starts operations this month – DOE

The Department of Energy (DOE) has finally declared the start of commercial operation of the Wholesale Electricity Spot Market (WESM) in Mindanao more than 5 years after its inception.

“The DOE hereby declares January 26, 2023 as COD [commercial operations date] of the WESM in Mindanao. For this purpose, the planning and scheduling of the capacities in Mindanao is based on the timetables generated by the IMO [Independent Market Operator] in accordance with WESM Rules and relevant market manuals and as otherwise provided herein,” states DOE Circular No. 2022-12-0039.

Energy Minister Raphael Lotilla signed the circular on December 23, 2022. It was released over the weekend.

The DOE previously released a draft departmental circular proposing to declare the WESM’s commercial operations in Mindanao on December 26, 2021. It didn’t catch on, and the launch date was previously pushed back to June last year, which also didn’t happen.

One of the reasons given was the ongoing Mindanao-Visayas Interconnection (MVIP) project.

The same DOE circular noted that the $52 billion linkage project is expected to be completed by March. The agency stressed that the commercial operation of the project requires the implementation of WESM in Mindanao to enable the efficient transmission and settlement of power exchanges over the Mindanao-Visayas link.

The MVIP will connect the Mindanao grid to the Visayas grid via an HVDC system with an initial capacity of 450 megawatts.

“Commercial operation of WESM Mindanao and the MVIP is intended to improve power reliability not only in the Mindanao grid but also in the Luzon and Visayas grids,” the DOE said.

As of November last year, 69 of the 100 expected attendees in Mindanao had completed registration in the WESM. The DOE said the remaining requirements of the unregistered participants would not impede the WESM’s commercial operations in Mindanao. The agency has given them until January 15 to register.

The WESM is the country’s electricity trading center. It is a central place for buyers and sellers to trade electricity as a commodity, with prices based on actual demand and supply. This allows power generation companies to sell their uncontracted excess capacity, while customers can buy additional capacity on top of their contracts.

WESM began commercial operations on the Luzon network in June 2006 and on the Visayas network in December 2010.