DOE believes Mindanao can sustain electricity market

DAVAO CITY (MindaNews / 29 June) – Energy Undersecretary Felix William B. Fuentebella said the energy sector hopes to sustain the excess power supply situation in Mindanao to prevent another “system blackout” or collapse that will hamper the operation of the newly-launched Wholesale Electricity Spot Market (WESM) in Mindanao.

The WESM’s predecessor, Interim Mindanao Electricity Market (IMEM) dubbed as the “baby WESM”, was launched under the Aquino administration in 2013 but was suspended in February 2014 due to a “system collapse” and the need to “resolve operational and commercial issues and concerns.”

During the launch at the SMX Convention Center Wednesday, Fuentebella said he believes that WESM Mindanao will not have the same fate as the IMEM. He pointed out that Mindanao previously suffered from chronic power outages, but now has excess in power supply capable of sustaining the operation of WESM that sets a trading floor for the electricity market.

WESM Mindanao is managed by the Philippine Electricity Market Corporation (PEMC).

“During IMEM in 2014, Mindanao had insufficient power. But beginning mid 2016, you already have excess power. What we want to maintain is to have excess power even when your economy and population grow bigger,” he said.

Fuentebella said the defunct IMEM is different from the WESM of the current Duterte administration.

Isidro Cacho, manager for corporate planning at the PEMC, said a system blackout may happen during the occurrence of a “force majeure” like typhoons or any factors that will cause a multiple tripping of the grid that will lead to the collapse of the entire system.

Having sufficient power is the very safety net to prevent similar incident from recurring, he said.

According to the Electric Power Industry Management Bureau data, Mindanao now has a total installed capacity of 3,352 megawatts (MW) as of the first half of 2017, in which available capacity is around 2,100 MW against the actual peak demand of 1,696 MW posted in April 2017.

Additionally, the increase in generation capacity will continue until 2019 with an expected 1,300 MW additional capacities to operate, and another 1,500 MW by 2022 from the indicative power projects.

Energy Secretary Alfonso G. Cusi said WESM Mindanao is part of DOE’s commitment to long-term energy security on the island by providing a competitive and transparent power market for electricity consumers.

“The launch of the Mindanao WESM brings us one step closer to the fulfillment of the intent to restructure the electric power industry – to introduce higher efficiency, greater innovation and end-user choice, as well as enhance the entry of competitive market forces,” he said.

The secretary believes “WESM is calculated to bring forth the beneficial effects of improved consumer services, lower electricity rates, and reasonable returns to investments.”

Fuentebella said they partnered with Energy Regulatory Commission and Philippine Competition Commission to check on abuse in the market and prevent any anti-competitive behavior. (Antonio L. Colina IV / MindaNews)