Best wishes to the WESM folks. This is going to be interesting.
I don’t look for problems in the WESM spot market during the first few months of operations. Anyway, we’re headed into the wet season with higher hydro and Luzon reserves are already fat. A good time for the WESM start-up.
A bigger test of the markets will come 8-10 months down the road – say around next summer.
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Summer, eh? ERC, WESM, and PEMC recently formed a tripartite committee to implement mitigation measures against price spikes and volatility. There’s a proposal to set an offer price cap at P62 per kWh. If I understand what you’re saying, we won’t really know if there’s something really wrong until next year, that is, when the tripartite committee’s life has ended and while we’re all busy with elections. Interesting …
P62/kWh? Just as a data point for reference – in California, anything over P13/kWh ($250/MWh) is considered a “price spike” and they have a “soft cap” set at about P21/kWh ($400/MWh).
I can’t imagine a P62 limit coming into play this year.
It seems to me that the first eight months or so will be spent with everyone finding their sea legs, seeing how the markets respond to everyday types of contigencies, making sure billing and remittance systems are working, a basic system shake-down.