Preferential Dispatch (RE in WESM)

“Preferential Dispatch” is the collective term for the two-tier dispatch priority granted to all qualified and registered RE generating units in the WESM. The framework was established by DC2015-03-0001 and significantly expanded by DC2022-10-0031 (Oct 2022) to cover all RE technologies, not only FIT-eligible plants [DC2022-10-0031, §§2–3, 2022-10-05].

Two-Tier Framework

Must Dispatch (Tier 1 — Intermittent RE)

Applies to variable/intermittent RE plants: wind, solar, run-of-river hydro, and ocean energy [DC2022-10-0031, §3(a), 2022-10-05].

• These plants are dispatched according to preference in the dispatch schedule whenever generation is available, regardless of price [DC2022-10-0031, §3(a), 2022-10-05].
• Statutory basis: RA 9513 §20 — qualified registered RE generating units with intermittent resources “shall be considered must dispatch” based on available energy [RA 9513, Section 20, 2008].
• The SO (NGCP) operates must-dispatch units in free active power production control mode by default. The SO may instruct active power reduction or immediate disconnection only where necessary for grid security and reliability, as prescribed in the Philippine Grid Code [DC2022-10-0031, §6.3(f), 2022-10-05].

Priority Dispatch (Tier 2 — Non-Intermittent RE)

Applies to all other qualified RE plants: biomass, geothermal, and impounding hydro [DC2022-10-0031, §3(b), 2022-10-05].

• These plants are given the option or preference to enjoy preferential dispatch in the WESM, taking into account their contractual obligations with customers [DC2022-10-0031, §3(b), 2022-10-05].
• Statutory basis: RA 9513 §7 — FIT-eligible plants (including biomass) enjoy priority connections, purchase, transmission, and payment [RA 9513, Section 7, 2008].
• Expansion from DC2015-03-0001: The original framework gave Priority Dispatch only to FIT-eligible biomass plants. DC2022-10-0031 extends it to all biomass (FIT and non-FIT), geothermal, and impounding hydro.

Coverage

DC2022-10-0031 covers all existing and new RE generating units [DC2022-10-0031, §2, 2022-10-05]. Emerging RE technologies may be granted preferential dispatch status by the DOE as they are approved [DC2022-10-0031, §5, 2022-10-05].

Stakeholder Responsibilities

Market Operator (IEMOP):

• Propose WESM Rule and Manual amendments to implement preferential dispatch for all RE
• Formulate qualification and registration procedures for preferential dispatch units
• Report annual compliance of RE generators on forecast accuracy standards to DOE
• Jointly with SO, implement technical mitigation measures [DC2022-10-0031, §6.1, 2022-10-05]

WESM Governance Arm:

• Monitor compliance of variable RE generators on submission of projected output per unit, per WESM Rules and approved forecast accuracy standards consistent with the Philippine Grid Code [DC2022-10-0031, §6.2, 2022-10-05]

System Operator (NGCP):

• Ensure maximum penetration of variable RE / must-dispatch units in the grid, with due consideration to grid security
• Produce and submit aggregated RE generation forecast for each interconnected system to MO within WESM Rules periods
• Submit operational reports to MO for all instructions that resulted in active power production changes
• Incorporate necessary transmission upgrades in the Transmission Development Plan to ensure non-discriminatory access for all preferential dispatch units [DC2022-10-0031, §6.3, 2022-10-05]

Distribution Utilities:

• Incorporate distribution upgrades in the Distribution Development Plan to ensure efficient, non-discriminatory access for embedded preferential dispatch units
• Ensure embedded preferential dispatch generating units are given priority to inject into the distribution network [DC2022-10-0031, §6.4, 2022-10-05]

Original Framework (DC2015-03-0001)

DC2015-03-0001 (March 20, 2015, Secretary Petilla) established the first implementing framework for Must Dispatch and Priority Dispatch pursuant to RE Act §20 and §7 respectively.

Original Dispatch Hierarchy (§10)

The 2015 circular established the following five-tier dispatch hierarchy for PEMC and NGCP to implement in the WESM Dispatch Protocol [DC2015-03-0001, §10, 2015-03-20]:

Constrained corridor rule: Where Preferential Dispatch Generating Units share a common constrained transmission facility, the hierarchy shifts to: (a) units under commissioning and testing first; then (b) pro-rated sharing based on available transmission capacity and Day-Ahead Generation Forecast of all affected units [DC2015-03-0001, §10, 2015-03-20].

NGCP Penetration Limit Duty (§7)

DC2015-03-0001 explicitly required NGCP to determine, through technical and economic analysis, the maximum penetration limit of intermittent RE-based plants to the grid, in consultation with stakeholders [DC2015-03-0001, §7(a), 2015-03-20]. This was the original basis for NGCP’s ongoing grid hosting capacity studies.

Interim Protocol (§11)

PEMC and NGCP were required to develop an Interim Protocol for the dispatch of Preferential Dispatch Generating Units to address prioritization of then-existing and upcoming wind power projects, to be submitted to DOE within ten (10) days of effectivity [DC2015-03-0001, §11, 2015-03-20].

Retroactive Effect (§14)

The guidelines for Must Dispatch and Priority Dispatch in the WESM Rules shall retroact to the date of effectivity of the RE Act (2008) insofar as the intended incentives for Preferential Dispatch Generating Units are concerned [DC2015-03-0001, §14, 2015-03-20].

Role of PEMC (2015 vs. Now)

Under DC2015-03-0001, PEMC was assigned the Market Operator functions: amending WESM Rules, formulating registration procedures, monitoring forecast accuracy compliance, and issuing operational reports. These responsibilities transferred to IEMOP when it replaced PEMC as market operator in December 2018.

Regulatory History

Penalties

Non-compliance is subject to penalties under RA 9513 §35(e) and its IRR [DC2022-10-0031, §7, 2022-10-05].