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ERC to suspend WESM trading when Luzon and Visayas are under red alert



ERC to suspend WESM trading when Luzon and Visayas are under red alert

The ENERGY Regulatory Commission (ERC) on Tuesday ordered the suspension of trading on the Wholesale Electricity Spot Market (WESM) during red alerts to prevent a spike in electricity prices.

“The extreme heat has increased electricity consumption, which has further increased the price increase. (On Tuesday), the ERC acted to temporarily suspend the operation of the WESM when the system operator or NGCP (National Grid Corp. of the Philippines) declared a red alert,” President Ferdinand R. Marcos, Jr. said. in Filipino during a speech. during a Labor Day event on Wednesday.

In an order dated April 30, the ERC said trading in WESM for the Luzon and/or Visayas network will be suspended during red alerts based on notices from the system operator or NGCP.

WESM is trade Ffloor for electricity. Under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001, the ERC may suspend the operation of the WESM or declare a temporary WESM outage “in cases of national and international security crises or natural disasters.”

During the period of market suspension, the ERC said the administrative price, or the price imposed by the market operator on trading participants during market suspension or market intervention, will be applied.

If a shipping interval is subject to both a price reduction and the regulated price, “the lower of the two prices will apply in the settlement of transactions for such interval,” the ERC said.

“The Commission is working twice as hard to mitigate the impact of El Niño on our energy system, and we are finding ways to mitigate the impact of the extremely high demand due to the high heat index, as this will ultimately be aFimpact our consumers,” ERC Chairman and Chief Executive Officer Monalisa C. Dimalanta said in a statement.

The ERC said average daily spot prices rose 11% in Luzon and 53% in the Visayas as warning notices were issued due to the high heat index. These increases would “have a significant impact on consumers’ electricity bills,” it added.

Based on ERC data as of April 25, the Luzon grid has been under red alert for 20 hours and 46 minutes and under yellow alert for 57 hours and 50 minutes. There were no yellow and red alerts in Luzon during the same period last year.

The Visayas network has been under red alert for 24 hours and 14 minutes and under yellow alert for 46 hours and 40 minutes. During the same period in 2023, the Visayas network was under red alert for only three hours and 59 minutes.

“This clearly shows that the warnings in 2024 are significantFicant oneFthereby affecting the state of the energy system due to the above reasons,” the ERC said.

With more than 100 cities and municipalities having already declared a state of emergency due to the extreme heat across the country, the ERC has determined that such a state is equal or comparable to a natural disaster.

The WESM trading suspension will only be lifted “if regional available capacity, minus actual regional demand, exceeds zero for 24 consecutive hours.”

“We also reiterate our call on distribution companies that source from the WESM to be proactive in exploring ways to reduce their exposure,” Ms. Dimalanta said in a statement.

“The impact of high prices can also be mitigated through existing programs, such as the Anti Bill Shock Lending Program of the Land Bank of the Philippines, to at least enable consumers to pay the incremental increases in their electricity bills in installments,” it added them to it.

Meanwhile, Luzon’s power grid was placed under yellow alert for the 12e this month after more than 1,000 megawatts (MW) of capacity became unavailable to the grid, the NGCP said.

In a statement on Wednesday, the NGCP said a total of 20 power plants in the Luzon grid were forced out, resulting in 1,409 MW worth of power being unavailable to the grid.

Of the twenty power plants, four were offline since last year, three between February and March, and 13 have been forced out this month.

The grid operator said a yellow alert will be issued in Luzon’s power grid between 8 p.m. and 10 p.m.

Yellow warnings are issued when the supply available to the electricity grid falls below a certain safety threshold. If the balance between supply and demand deteriorates further, a red alarm is issued.

Peak demand in Luzon was 12,899 MW, while available capacity is 15,026 MW, according to NGCP data.

In a statement, the Philippine Energy Efficiency Alliance (PE2) said the Philippines needs to reduce a total of 3,340 MW of peak demand to power supply managementFicit.

“PE2 believes that our limited power supply capabilities can be optimally planned and dispatched if we try FLet’s use our steep peak demand curves as a first step. There is so much talk about increasing our thinning reserves by accelerating the addition of new power plants, but there are no conscious and concerted efforts to reduce or shift peak demand to o.Ff peak periods,” said Alexander D. Ablaza, president of PE2, in a press release.

The group suggested managing peak demand before deploying new generation and transmission capacities in key networks to address the country’s problems.ffiicient nutrition. — Heroes Joy Talavera And Ashley Erika O Jose