Inside The Market
WESM Mission
To establish a competitive, efficient, transparent and reliable market for electricity where:
The establishment of the Wholesale Electricity Spot Market (WESM) is a landmark achievement for the Philippine Power Industry.
It marks a fundamental change from a monopoly industry to a competitive market.
Among points previously cited above, the WESM was established to deliver the following:
Gross Pool
All energy transactions - like the demand and supply of electricity - are schedule through the market.
This allows the power produced, supplied and used to be accounted for.
Net Settlement
Bilateral contract quantities transacted in the pool can be settled outside the market.
Locational Marginal Price
Marginal price is computed at each node or location to reflect transmission loss and/or congestion
Reserve Co-optimization
Reserve and energy offers are scheduled at the same time
Demand Bids
Customers have the option to buy energy at a price lower than the regulated rate
Mandatory Market
Existing distributors are mandated by law to procure at least 10% of its electricity from the WESM for the first 5 years from its establishment. Entities directly connected to the grid are not allowed to inject or withdraw without registering in the WESM.
The Future of WESM
2007-2008
For the immediate future, the WESM projects to achieve the following:
To establish a competitive, efficient, transparent and reliable market for electricity where:
- A level playing field for the trading of electricity exists among WESM Participants
- Third parties are granted access to the power system
- Prices are governed by commercial and market forces
- Efficiency is encouraged
The establishment of the Wholesale Electricity Spot Market (WESM) is a landmark achievement for the Philippine Power Industry.
It marks a fundamental change from a monopoly industry to a competitive market.
Among points previously cited above, the WESM was established to deliver the following:
- The development of the infrastructure supporting the WESM called the Market Management System (MMS)
- Set international benchmarks for development time and cost
- Fully functional locational marginal pricing (LMP) covering 215 energy trading nodes
- A team of highly professional industry experts operate the market at a high level of cost efficiency
Gross Pool
All energy transactions - like the demand and supply of electricity - are schedule through the market.
This allows the power produced, supplied and used to be accounted for.
Net Settlement
Bilateral contract quantities transacted in the pool can be settled outside the market.
Locational Marginal Price
Marginal price is computed at each node or location to reflect transmission loss and/or congestion
Reserve Co-optimization
Reserve and energy offers are scheduled at the same time
Demand Bids
Customers have the option to buy energy at a price lower than the regulated rate
Mandatory Market
Existing distributors are mandated by law to procure at least 10% of its electricity from the WESM for the first 5 years from its establishment. Entities directly connected to the grid are not allowed to inject or withdraw without registering in the WESM.
The Future of WESM
2007-2008
For the immediate future, the WESM projects to achieve the following:
- Establish an Ancillary services market
- Visayas area integration into the WESM
- Establishment of a Forwards Market and the Development of the Central Registry System (B2B) for the Retail Electricity Supply