The integration of Wholesale Electricity Spot Markets (WESM) in Luzon and Visayas is getting push from industry players, and this is similarly seen among the short-range fix to the latter grid’s supply deficit dilemma.

It was noted that with the spot market’s amalgamation, the export of power supply may be pursued. And given the presence of an alternative market, investors would be more willing to pour in capital for infrastructure – whether for transmission upgrades and expansion or for capacity addition.

The commercial operation of the WESM in Visayas is classified among the long-delayed policy reforms set out under the Electric Power Industry Reform Act (EPIRA) now badly needing implementation.

Aboitiz Power senior vice president Luis Miguel Aboitiz opined that the “start of WESM in the Visayas is needed and should be implemented as soon as possible.”

Of course, Ernesto Pantangco, president of the Philippine Independent Power Producers Association has gone ahead in proposing Visayas WESM’s commercial operation, citing that the interim solution set out by government has already outlived its relevance.

The kick-off of the Visayas spot market has perpetually been caught in a chicken-and-egg dilemma – with the Department of Energy (DoE) delaying its operation for fear of electricity price spikes while investors are reluctant pouring in capital for new power projects without seeing a commercially-working WESM.

It has been emphasized that while new generation plants are required, private investors are unlikely to build new plant unless there is an operating WESM to serve as an alternative market for their capacity.

Easing supply constraints in Visayas is expected addressed in two ways: upgrading of transmission lines and construction of new power plants. The other solution would involve high level of contracting by market participants that would have long years of duration. While it appears on surface that Visayas has sufficient capacity to meet peak demand, it was noted that constraints in transmission capacity have been adversely affecting supply-demand balance.

It has been noted that most of the generating units in Visayas are operating below their

registered capacities. As a result, the grid has a lot less dependable generation “than might appear based on the rated capacities.”