| Sat, 13 Sep 2025
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PEMC Reports: Reserve Market Delivers Stronger Grid Reliability One Year After Commercial Operations Resume
A year after the Reserve Market resumed commercial operations in August 2024, the Philippine Electricity Market Corporation (PEMC), through its Enforcement and Compliance Office (ECO), reports that the Philippines' power grid has achieved remarkable stability improvements. The Reserve Market has proven to be a critical mechanism for ensuring nationwide reliability by facilitating the procurement of essential ancillary services across the Luzon, Visayas, and Mindanao grids.
Significant improvements in power grid security have been realized with 98.39% reduction in Red and Yellow Alerts versus multiple alerts during the suspension period, with enhanced reliability attributed to better reserve requirement fulfillment and strengthened compliance among Ancillary Services Providers (ASP).
Grid Security Dramatically Improves
The most striking indicator of success has been the dramatic reduction in Red and Yellow Grid Alerts. From August 2024 to July 2025, only one (1) Yellow Alert was recorded across the entire grid system, which occurred in Luzon in March 2025. This represents a significant improvement compared to the April to July 2024 suspension period, when multiple Red and Yellow Alerts were declared across the grid.
Regional Growth in Reserve Capacity
Reserve Market participation has increased across all major regions, with registered reserve capacities expanding significantly with Mindanao focused on restructuring with strategic capacity adjustments:
|
Region | Reserve Type |
Registered Reserve Capacity, MW |
Change in Reserve Capacity (%) |
|
|
August 2024 |
July 2025 |
||
|
Luzon |
6,754 |
7190.4 |
20.27% |
|
Visayas |
813.5 |
861.7 |
27.47% |
|
Mindanao |
2,417.4 |
||
The growth reflects the successful implementation of the Department of Energy (DOE) policy to promote generator facility certification for ancillary services and encourage Reserve Market participation.
Flexible Procurement Strengthens System
The Reserve Market has enabled flexible procurement of ancillary services through spot transactions, which averaged 32.23% of scheduled reserves in Luzon, 61.46% in Visayas, and 11.47% in Mindanao over the reporting period. This flexibility complements existing Ancillary Services Procurement Agreements (ASPA) to ensure comprehensive reserve coverage.
Compliance Culture Matures
The monitoring of PEMC’s ECO has revealed a marked reduction in non-compliances under the Reserve Conformance Standards (RCS) as well as the Reserve Offered Capacity Compliance (ROCC), indicating a maturing compliance culture among ASPs.
The RCS assess accuracy, timeliness, and sustainability of ancillary services delivered by scheduled reserve facilities.
On the other hand, the ROCC monitors the compliance with the submission of reserve offers regardless of the existing ASPA.
Financial accountability measures remain in place, with confirmed breaches resulting in non-payment of Reserve Trading Amounts (RTA) and penalties distributed to end-users according to approved guidelines. A penalty relaxation period from August 2024 to February 2025 supported the transition under the Ancillary Services Monitoring (ASM) Manual's Transitory Provision.
Looking Ahead
With sustained fulfillment of reserve requirements and stronger adherence to the RCS as well as the ROCC, the power grid is positioned for continued reliability improvements. The success of the Reserve Market's first year demonstrates its effectiveness as a cornerstone of the Philippines' power system security framework.
The Reserve Market operates alongside existing contracting mechanisms to ensure adequate reserve capacity across Contingency, Regulating, and Dispatchable Reserve categories, supporting the country's growing energy demands while maintaining system stability.
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