Wholesale Electricity Spot Market Rules
(WESM Rules)
Presentation Outline:
1. The WESM Rules
2. Regulatory Filings
3. The Phillipines WESM
•
The WESM Rules
- EPIRA mandate
-Section 30
WESM Rules - establishes the basic rules,
requirements, and procedures that govern the operation
of the Philippine electricity market.
A consolodated set of rules covering:
1. operation of pool
2. metering and settlement
3. scheduling/dispatch
4. dispute resolution
5. rule change process
C H A P T E R 1 - Introduction
- Regulatory framework
- Governance
- PEM Board
- Composition of PEM Board
- Functions
- Working Committees
C H A P T E R 2 - Registration of Members
and Fees
- WESM Members
- Persons who must be authorized by
the ERC to operate in the restructured
industry - Network Service Provider,
Ancillary Service Provider, Suppliers,
Generators and Meter Service Providers.
- Others who intend to participate in the
C H A P T E R 2 - Registration of Members
and Fees
- Market Fees
- Level and structure for ERC approval
- Components of market fees
- registration fees
- meteering fees
- billing and settlement fees
- administration fees
- other costs incurred by PEM Board
and working groups
C H A P T E R 3 - The Market
C H A P T E R 4 - Metering
C H A P T E R 5 - Market Information
and Confidentiality
C H A P T E R 6 - Intervention and
Market Suspension
C H A P T E R 7 - Enforcement and
Disputes
C H A P T E R 8 - Rule Change
C H A P T E R 9 - Interpretation
C H A P T E R 10 - Transitory
Provisions
Regulatory Approvals
- Price Determination Methodology
- Market Fees
- Administered Price Determination
Methodology
Regulatory Approvals
Price Determination Methodology (PDM):
The PDM determines the price of electricity
not covered by bilateral contracts between
sellers and purchasers of electricity users using
the Market Dispatch Optimization Model
(MDOM).
Regulatory Approvals
Administered Price Determination Methodology
(APDM):
The PDM determines the price of electricity
not covered by bilateral contracts between
sellers and purchasers of electricity users using
the Market Dispatch Optimization Model
(MDOM).
Regulatory Approvals
APDM:
The price and schedule for a given price
schedule shall be equivalent to the load
weighted average ex-post price of the
corresponding trading interval of the four
preceding same days, that have not been
administered.
Regulatory Approvals
The market fees are categorized into:
1. Market Regisatration Fees - to cover the
expenses for registering WESM members,
which are not included in the calculation of the
total Market Transaction Fees requirement of
PEMC.
2. Market Transaction Fees - the total
budgeted revenue requrements of PEMC in
operating and governing the market.
How will be the WESM be governed?
Department of Energy (DOE) -
supervises the restructuring of the
electricity industry. The Act, mandates
DOE, together with industry participants,
to formulate the detailed rules for the
WESM.
How will be the WESM be governed?
Energy Regulatory Commission
(ERC) - approves the Price Determination
Methodology and the Market Fees. It also
sets the criteria for eligibility for
membership in the WESM market and
performance standards through the Grid
Code.
How will be the WESM be governed?
Philippine Electricity Market Corporatio
(PEMC) - the governing body of the WESM,
enforcing and modifying rules to safeguard
the WESM mechanism and its participants, it
manages the system to ensure it meets
standards and targets, registers participants
and resolves their disputes.
Key Players in the WESM
Governance and Regulatory Structure for the WESM
What is the role of the Market Operator?
- Administers the operation of the WESM in
accordance with the WESM Rules.
- Operate the WESM on a non-profits basis.
- Determines the dispatch schedule of all
facilities.
- Monitor daily the trading activities in the
market.
What is the role of System Operator?
- Operate the power system in accordance with
the WESM Rules, Grid Code or any instruction
from the MO or the ERC to ensure security and
reliability of the power system.
- Provide central dispatch to all generating
facilities and loads in accordance with the
dispatch schedule submitted by the Market
Operator.
The Philippine WESM
A centralized venue for sellers and buyers to trade
electricity as a commodity.
- WHOLESALE market is open to generators, distribution
utilities, directly connected costumers, large costumers
and eventually supply aggregators with at least one
Mega-Watt (MW) of lelectricity requirement.
- SPOT market is traded in real time because it cannot be
stored for future use. Electricity is difficult to store.
WESM
As envisioned, the WESM will proide an efficient
and transparent venue for trade and investment in the
power industry.
The WESM is aimed to:
- Provide cost-efficient dspatch of power plats
through an ecnomic merit order;
- Create reliable price signals to assist participants
in weighing investment options;
- Provide a fair and level plaing field for sellers and
buyers of electricity as prices are driven by market
forces.
The WESM and its Basic Concepts
- Market place for trading
electricity as a commodity that
reflects the market based value
of elecricity.
- Prices not subject to regulation
but governed by maret forces.
- Uses the concept of a “gross pool” where all
electricity output including those not covered by bilateral
contracts are centrally coordinated while allowing
generators/consumers to compete to be scheduled and
dispatched to meet the electricity demand in real time.
Locational Marginal Pricing
Cost of supplying next MW of load at a
specific location, considers generation
marginal cost, cost of losses and
transmission congestion cost.
LMP = Generation + Losses + Congestion
In sum,
Unconstrained system - the market price is set by
one marginal plant. The price is adjused for each node to
consider transmission losses, and the resulting value is
the LMP.
Where the system is constrained - the relevant
flows of electriity are affected as the line limitations
arising from the constraint may impede the supply of
cheaper electricity from one area to another.
Economic Dispatch; Supply and Demand
Ex-ante and Ex-post Pricing
EX-ANTE - Intial loading level at the beginning of the hour.
EX-POST - Actual Metered Dispatch
EAETA = Ec-Ante Energy Trading Amount
EPETA = Ex-post Energy Trading Amount
Thank you for listening!
GROUP 12
Martin Cordero
Eliahkim C. Gadian
Swuidean Ganea