REGIONAL DEVELOPMENTS:

PHILIPPINESSingapore Electricity Roundtable 2015

08 July 2015

Outline

Market

Developments

Market

Statistics

WESM

Overview

Future

Directions

WESM OVERVIEW

What is the WESM?

• The Philippine wholesale electricity spot market

(WESM) is a real time energy market.

• It is currently operational in two of the three major

regions of the country, Luzon and Visayas, which are

interconnected by an HVDC link.

• The WESM was created in 2001 by virtue of the

Electric Power Industry Reform Act (EPIRA).

WESM Objectives

• To establish a competitive, efficient, transparent and

reliable market for electricity where:

A level playing field exists

Trading of electricity is facilitated

Third parties are granted access to the power

system

Prices are governed as far as practicable by

commercial and market forces

Efficiency is encouraged

Market Design

HOURLY, REAL TIME GROSS POOL

SCHEDULING

PRICING SETTLEMENT

NET SETTLEMENT

MANDATORY

NODAL (LMP)

BID/OFFER-BASED

EX

ANTE

EX

POST

TWO-SETTLEMENT SYSTEM

Market Structure

PEMC Board

PEM Auditor

Rules Change

Committee

Dispute Resolution

Administrator

Market Surveillance

Committee

Technical CommitteeEnforcement and

ComplianceMarket Assessment

GroupMarket Operator

Self-Governance & Operations

Suppliers /

Aggregators

Metering Services Providers

Network Service Providers

(NGCP & DUs)

Generators /

A / S Providers Customers

MARKET DEVELOPMENT

Implementation: Timeline

Market Development

INTEGRATION

OF VISAYAS

IN THE WESM

DECEMBER 2010

RETAIL

COMPETITION

AND OPEN

ACCESS

(PHASE I)

JUNE 2013

INTERIM

MINDANAO

ELECTRICITY

MARKET

DECEMBER 2013

CENTRAL

SCHEDULING

OF ENERGY

AND RESERVES

(TRIAL)

MARCH 2015

RENEWABLE

ENERGY MARKET

TRADING OF

RE

CERTIFICATES

Renewable Energy

INTEGRATION OF

INTERMITTENT RE

RESOURCES IN THE WESM

PREFERENTIAL

DISPATCH

FEED-IN TARIFF

MECHANISM

REMMITANCE

OF WESM

PROCEEDS TO

FIT-ALL FUND

MARKET STATISTICS

Market Participants

64 85 77

Registered

Capacity:

15,892 MW

Intermittent

RE:

511 MW

Market Trading Nodes

GENERATOR

NODES

CUSTOMER

NODES

113 222LUZON

GENERATOR

NODES

CUSTOMER

NODES

63 99VISAYAS

Generation Mix

0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013 2014

SOLAR BIOFUEL

WIND DIESEL/OIL

GEOTHERMAL HYDROPOWER

COAL NATURAL GAS

2014 GEN MIX

Supply, Demand & Load-Weighted Ave. Price

MALAMPAYA

PLANNED

MAINTENANCE

MAINTENANCE

SHUTDOWNS OF

SEVERAL COAL

/ NAT. GAS

PLANTS

TYPHOON

“GLENDA”

NOTE: 7-DAY SIMPLE MOVING AVERAGE (SMA)

A

A AA C AB B

B

C

A

2009 2010 2011 2012 2013 2014 2015

Market Transaction Levels

YEAR 2007 2008 2009 2010 2011 2012 2013 2014

Luzon Peak Demand, MW 6,590 6,681 6,932 7,643 7,530 7,898 8,237 8,671

Visayas Peak Demand, MW -- -- -- -- 1,447 1,486 1,572 1,550

System Peak Demand, MW -- -- -- -- 8,849 9,303 9,735 10,145

Total Energy Volume, GWh 40,052 41,153 42,168 46,228 53,006 55,822 57,901 59,474

Spot Volume, % 15% 14% 15% 14% 8% 8% 10% 7%

Effective Spot Settlement

Price, USD/MWh124 102 91 163 116 181 129 127

FUTURE DIRECTIONS

Future Directions

RCOA

Phase II

Contestability

threshold: 750

KWH monthly

average

Reserve Market

Pricing and cost

recovery

mechanism – for

regulatory

approval

Market Systems

Central Registration

and Settlement

System: 2015

New Market

Management

System: 2017

Mindanao

Preparations for

IMEM resumption

Readiness

assessment:

WESM Mindanao

Research and

studies ongoing

Derivatives

MarketTraders

Accreditation

Program

Industry Code of

Ethics

Market

Governance

For more info, visit www.wesm.ph

THANK YOU VERY MUCHWESM Works.