RENEWABLE ENERGY (RE)

RESOURCES
IN THE
PHILIPPINE WHOLESALE ELECTRICITY SPOT
MARKET (WESM)

Engr. Raymond Joseph Marqueses

Sr. Specialist, Market Operations Development

27 November 2019, SMX Convention Center

WESM OVERVIEW

2
 WHOLESALE ELECTRICITY SPOT MARKET
WHAT IS WESM?

Contracts to
Supply Electricity
Distribution Utilities, Bulk Users
Electric Cooperatives, Private

Generation Companies
Real-Time Supply
with Market-Based
Pricing

WESM provides another option for supply of electricity for ECs, PDUs, and bulk
users. Prices in the WESM are determined through competition based on real-
time offers and demand for electricity. 3
WHOLESALE ELECTRICITY SPOT MARKET
HOW ARE PRICES AND SCHEDULES DETERMINED?

Gen 200 MW
Transmission
A @ P 5.0 / kWh System

Gen 100 MW L 200 MW

B @ P 2.0 / kWh
Demand

P/kWh
Gen 300 MW
@ P 1.0 / kWh
L 100 MW
C

Gen 150 MW
D @ P 3.5 / kWh L 250 MW
Scheduled MW
Gen 50 MW to dispatch
E @ P 3.0 / kWh 550 MW
Other considerations: transmission system
limitations, real-time system status

On an hourly basis, generators are dispatched according to

their offer price from the cheapest to the most expensive.
WHOLESALE ELECTRICITY SPOT MARKET
HOW ARE PRICES AND SCHEDULES DETERMINED?

Gen 200 MW
A @ P 5.0 / kWh

Gen 100 MW L 200 MW

B @ P 2.0 / kWh
Demand

P/kWh
Gen 300 MW
@ P 1.0 / kWh
L 100 MW
C
3.5
Gen 150 MW
D @ P 3.5 / kWh L 250 MW
Scheduled MW
Gen 50 MW to dispatch
E @ P 3.0 / kWh 550 MW
Other considerations: transmission system
limitations, real-time system status

Market clearing price (e.g., PhP 3.5 / kWh) is set by the offer
price of the plant necessary to serve the demand
 WHOLESALE ELECTRICITY SPOT MARKET
HOW ARE PRICES AND SCHEDULES DETERMINED?
Market Trading Node

3.639

3.645
Demand
P/kWh

3.660

3.670 3.640
3.5

3.760
Scheduled MW 3.908
to dispatch 3.740
3.895

Economic scheduling of Locational marginal pricing considering

generators based on their offer price cost of losses and congestion
WHOLESALE ELECTRICITY SPOT MARKET
MARKET OUTCOMES

Events of Thin Supply Margin

Events of High Prices

Jul Aug Sep Oct

REGISTERED CAPACITY OUTAGES MALAYA DE-RATINGS AND CAPACITY GAP GENERATION OFFERS
ACTUAL DEMAND SPOT AVERAGE PRICE
 WHOLESALE ELECTRICITY SPOT MARKET
MARKET OUTLOOK

AVAILABLE CAPACITY SYSTEM DEMAND PRICE

18000 60

16000

MARKET PRICE, PESOS PER KILOWATT-

50
SUPPLY AND DEMAND, MEGAWATT

14000

12000 40

10000

HOUR
30
8000

Outlook on Average
6000 20
Price(Php/kWh) for Q4 2019:
4000 2.79 Php/kWh 10
2000

0 0

Jul Aug Sep Oct Nov Dec

4.99 3.00 2.18
Php/kWh Php/kWh Php/kWh
 RENEWABLE
ENERGY (RE) IN THE
WESM
9
 RE IN THE WESM
WESM REGISTERED CAPACITIES
Renewable
Energy
Resources
5,946 MW
Solar
(30%) 823 MW

Biomass
415 MW

Wind
427 MW

Hydro
2,529 MW
(Run-of-River – 50MW)

Geothermal
Other Generator 1,751 MW
Resources
14,090 MW
(70%)
*as of November 2019
10
RE IN THE WESM
GENERATION SHARE (2019)

Renewable
Energy Solar
Resources 1.4%
14.4 TWh
(21%) Biomass
0.8%

Wind
1.0%
Other Generator
Resources Hydro
55.8 TWh 6.0%
(79%)
Geothermal
11.3%

*as of October 2019

11
 RE PROGRAMS IN THE WESM
PREFERENTIAL DISPATCH

VRE & FIT

plants

5
4
3
2
1

Preferential Dispatch for Variable RE (VRE) resources (e.g., wind, solar)

and those under the Feed-In Tariff (FIT) System (inc., biomass)

12
 RE PROGRAMS IN THE WESM
FORECAST ACCURACY STANDARDS
FAS Measures 2018 Performance
40
Measure Description Requirement
36 94%
35 34
18%
Mean
(Solar, Wind)
Absolute Annual
30
Percentage average of
9%
Error hourly error
(Run-of-River
(MAPE) 25
Hydro)

20

95% of hourly 36%

15
errors should 13
Percentile
be less than 30%
95 (Perc95)
the 10 100%
requirement 7 71% 71% 7 7
5 5
5 29%
2

0
Run-of-River Hydro Solar Wind

Total No. of Resources Passed MAPE Passed Perc95

Forecast Accuracy Standards – required for must dispatch generating

units (i.e., wind, solar, run-of-river hydro) to be complied on an annual
13
basis
RE PROGRAMS IN THE WESM
RENEWABLE ENERGY CERTIFICATES (REC)

RECs may be sold to DUs

Sales to the WESM will
and Retail Suppliers who
provide the RE Resource
need RECs to comply
one (1) REC for each
with the Renewable
MWh generated
Portfolio Standards (RPS)
RE PROGRAMS IN THE WESM
DISTRIBUTED ENERGY RESOURCES (DERs)
DER Aggregator
Sample DERs:

Sample markets
with aggregators

Renewable
Energy Facilities

Wholesale
Electricity
Managed Load Market
(ex. E-vehicle
charging)

Energy Storage

Other wholesale electricity markets have tapped distributed energy

resources in the provision of energy and ancillary services by
introducing aggregators.
MARKET DEVELOPMENT
Target: Short-term Medium-Term Long-Term

Financial
Enhanced Demand-Side
WESM Design
Mindanao
Bidding
Transmission
Rights

Reserve Co-
optimization
Demand
Market with Energy
Response

Retail Reduce
Barriers to Mindanao Aggregation
Full Retail
Market Entry
Competition

Other Forwards
Renewable
Energy
Markets Market
Market

Ongoing activities 16