Power reserves are critical component of the efficient and reliable operations of the electricity system, but the establishment of the proposed “reserves market” has been encountering delays partly due to the failure of the Philippine Electricity Market Corporation (PEMC) to comply with some of the regulator’s directives.

“They (PEMC) did not comply with the directives under our Order. They merely filed a motion to implement, but they failed to resolve the issues raised,” Energy Regulatory Commission (ERC) executive director Francis Saturnino Juan said.

In a text message to Manila Bulletin though, PEMC president Melinda L. Ocampo clarified that while there are some concerns yet to be addressed, they already complied with some of the directives in the ERC ruling.

“We have complied except for the technical study that should be jointly undertaken by SO (System Operator National Grid Corporation of the Philippines) and MO (market operator),” she said.

Given that work backlog, the PEMC chief executive noted that “the completion will take some time.”

For the industry players, the creation of a reserves market is essential because this will help ensure reliable power supply in the system. That will also then set demarcation line on capacities being traded in the market – either as reserve or as part of the supply curve.

In a deregulated power market, customers have the freedom to purchase their spinning reserves requirement directly with power suppliers or via the electricity spot market.

Ocampo explained that the reserve market is designed as a component of the ancillary services market envisioned to be integrated with the offers in the Wholesale Electricity Spot Market.