By Victor V. Saulon, May 1 2019; Business World

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THE Department of Energy (DoE) said embedded generation plants, or those that are not directly connected to the power grid but supply electricity to a distinct area, are now required to register with the Wholesale Electricity Spot Market (WESM).

“If they are not participating in WESM activities, then we don’t know when they are in or out, and then suddenly if they are out then WESM has to provide the power,” said Mario C. Marasigan, director of the DoE’s Electric Power Industry Management Bureau, said in a recent interview.

He said there is a need for embedded power generation plants to register to allow the regulator as well as the grid operator to know exactly the existing power demand and the corresponding power supply to meet it.

Embedded power generating units are indirectly connected to the grid — or the interconnected power assets that transmit high-voltage electricity through transmission lines, towers and substations — through the distribution system that supplies power to its host distribution utility.

He said the DoE had issued a department circular providing for the framework governing the operations of embedded generators. That circular had already been published and should be in effect by now, he added.

“Once it’s effective, then they should follow. For example, in Mindanao if I’m a 5-megawatt (MW) embedded generator, I should register now with WESM. If I am below [5-MW], then I need not,” Mr. Marasigan said.

He said the need to register with the spot market comes at a time when power plants had been failing and reducing available supply. If embedded generators similarly fail, the distribution utility they serve would need to turn to the grid to source power.

Mr. Marasigan said if the embedded generator is not participating in the spot market, the DoE will not be able to allocate the required capacity should the generator go into an unplanned outage.

Under the DoE circular, embedded generators that provide at least 5 MW in the Visayas and Mindanao grids are to register with the WESM. In Luzon, the corresponding capacity threshold is 10 MW.

Embedded generators that do not meet the threshold may register in the WESM on a voluntary basis. End-users with generating units exporting power to the grid or distribution system should register in the WESM both as customer and generation company. — Victor V. Saulon