Everybody has gone to a lot of trouble to try to build a competitive, price-deregulated “power market” here in the Philippines.
GMANews reports “that the Department of Energy (DOE) said it has appealed to businesses to use their “idle” generators instead of buying power from Napocor” during our power shortage this week.
But in a power market, you “pay” people to generate.
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Let the market work! Have prices reflect the tight supply to get those oil-fired peakers in-the-money. Then there’d be less need for all these government “begging” nor it’s dancing for rain.
Hehe. Yep. But more to the point, the DOE – or rather ERC – can have a pro-active role here. The ERC, with DOE backing, should see to it that the utilities actually implement a program to procure power during such emergencies from embedded, private generators. DOE public appeals can actually have an effect and therefore a role – but they should complement economic programs – programs that, after all, actually do have a public interest.
Sounds easy to implement but injecting those precious MW to the system is not a simple process. These embedded plants should at least be a registered member of the WESM,with WESM compliant meters, followed all technical requirements, no problemo with “synchronization”, and have a direct link to the grid.
eDOE – But wait, the Secretary just asked for them to inject those precious MW into the system. The issue of synchronization, technical requirements, grid connection – or WESM registration – didn’t even come up in his appeal. So it must be possible to do already.
I don’t want to play down the administrative requirements of metering and remittances, but I’m just suggesting that a program be put in place to “pay” them to generate or alternatively take load off the system during grid shortages – and make it as simple as possible.
I think the prices of energy nowadays are more competitive than before. With the establishment of the WESM, distribution utilities have now an option where to procure their energies, i.e., from the WESM or NPC or owned-IPP.
It is a fact that WESM prices are fluctuating. Some intervals have prices that are below the existing TOU rates, while there are intervals that reflect very much higher prices than the TOU benchmark. Hence, a well-executed BCQ declaration could enable a DU to take advantage of the lower prices and get rid off high market prices.
However, it is quite frustrating the some DUs do not want to exercise their privileges and rather leave their fate to NPC, which is currently trading on behalf of those DUs that are indirect WESM participants.
But it is quite more frustrating that NPC does not allow DUs to exercise their right to declare BCQs after the fact, which was in accordance with the WESM Rule.
NPC always argued that such would result to cherry-picking. It’s true! However, NPC does not realize that whether DUs cherry-picked or not, the energies that they declare in the market as BCQ are already committed, which means regardless of how high or low prices in the WESM are the DU would still be paying the same TOU rate for the corresponding intervals where they chose to declare their BCQs lest they’ll be charged at higher market rates.
In so doing, cherry-picking is just aimed to avoid being charged with higher market rates vis-a-vis TOU rates.