=== dc2024-01-0003-pages-01.ppm === . SSN) DEPARTMENT OF ENERGY oie (Kagawaran ng Enerhiya) @ Se Republic of the Philippines DEPARTMENT CIRCULAR NO.___DC2024-o!- 0003 ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND VARIOUS WESM MANUALS (Provisions on Maximum Available Capacity) WHEREAS, Sections 30 and 37(f) of Republic Act (RA) No. 9136, or the “Electric Power Industry Reform Act of 2001” (EPIRA), provide that the Department of Energy (DOE), jointly with the electric power industry participants, shall establish the WESM and formulate the detailed rules governing the operations thereof: WHEREAS, on 28 June 2002, the DOE, with the endorsement of the electric power industry participants, promulgated the WESM Rules through Department Circular (DC) No. DC2002-06-003; WHEREAS, any changes, amendments, and modifications to the WESM Rules, including its Market Manuals, shall be undertaken in accordance with the provisions of Chapter 8 thereof: WHEREAS, it is the market design principle and characteristic of the WESM that it is a gross pool, where each Scheduled Generation Company offers its maximum available capacity, Non-Scheduled Generation Company submits a standing nomination of loading levels, and Generation Company with must dispatch and priority dispatch generating units submits projected outputs, for central scheduling and dispatch to ensure system security and a level playing field among generators; WHEREAS, in order to prevent the withholding of capacity, Trading Participants in the WESM are obliged to observe the ‘Must Offer Rule’ (MOR), as provided under Clause 3.5.11.6 and Appendix A1.1 of the WESM Rules and which requires that generation offers shall not be less than the maximum available Capacity for every dispatch interval and that reasons or circumstances shall be provided whenever bids or offers are cancelled or less than the registered Capacity; WHEREAS, on 06 July 2023, the PEM Board, in compliance with Chapter 8 of the WESM Rules, submitted its proposed amendments to the WESM Rules and various WESM Manuals, which amendments propose to harmonize all provisions on maximum available capacity, and reinforce the obligation of Trading Participants to comply with the Must Offer Rule; WHEREAS, the DOE, recognizing that the intent of the proposal is consistent with the objectives of the EPIRA and the WESM, drafted a circular to solicit comments and recommendations from interested parties, posted the same on the DOE website on 07 August 2023 and conducted the following public consultations: Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City, Philippines 1632 Tel. No. (Trunkline) (632) 8479-2900 Website: http://www.doe.gov.ph; Email: info@doe.gov.ph === dc2024-01-0003-pages-02.ppm === DC re: Adopting Further Amendments to the WESM Rules and Various WESM Manuals Page 2 of 10 Leg | __— Date [| Venue Luzon quig Visayas Mindanao NOW, THEREFORE, after careful review of the PEM Board proposal and the comments and recommendations received from other stakeholders, the DOE, pursuant to its authority under the EPIRA and the WESM Rules, hereby adopts, issues, and promulgates the following amendments to the WESM Rules, the WESM Manual on Dispatch Protocol, the WESM Manual on Registration, Suspension and De- registration Criteria and Procedures, the WESM Manual on Market Network Model Development and Maintenance — Criteria and Procedures, the WESM Manual on Price Determination Methodology, the WESM Manual on Protocol for Central Scheduling and Dispatch of Energy and Contracted Reserves and the WESM Penalty Manual: Section 1. Amendments to the WESM Rules. The following provisions of the WESM Rules are hereby amended: 3.5.5 Generation Offers and Data 3.5.5.1 Each Generation Company including Generation Companies with bilateral contracts shall submit a standing market offer equivalent to the maximum stable load (Pmax) or available capacity, for each of its scheduled generating units, battery energy storage systems, or pumped-storage units for each dispatch interval in each trading day of the week in accordance with the timetable. If the submitted offer reflects a capacity that is less than the maximum Stable load (Pmax), the Generation Company shall include the reason for such in its standing offer. The standing market offer shall apply until revised or updated by the Generation Company. XXX XXX XXX 3.5.11 Revision of Market Offers/Bids, Nomination of Loading Levels, and Projected Outputs 3.5.11.1 Each Trading Participant which has submitted standing offers or bids for each of its scheduled generating unit, battery energy storage system, or pumped-storage unit may revise any of its market offers or market bids equivalent to the available capacity and shall take into account the conditions under Clause 3.5.11.5 and Clause 3.5.11.6, for any dispatch interval in any trading day of the current week-ahead market horizon. Each revised market offer or market bid shall be submitted in accordance with the timetable subject to Clause 3.5.11.4, and contain all the information set out in Appendix A1. XXX XXX XXX 3.5.11.5 Market bids or market offers for any dispatch interval shall be revised by Trading Participants prior to gate closure in === dc2024-01-0003-pages-03.ppm === DC re: Adopting Further Amendments to the WESM Rules and Various WESM Manuals Page 3 of 10 accordance with the timetable if these offers no longer represent a reasonable estimate of: (a) the status of the relevant generating unit (e.g., generator circuit breaker status, outage) or scheduled load for that dispatch interval: or (b) the capacity that can be attained taking into account the ramp rate limitations of the generating unit during the relevant dispatch interval: or (c) the demand bids or offers likely to apply for the real-time dispatch optimization of that dispatch interval. XXX XXX XXX Chapter 11 GLOSSARY XXX XXX XXX Availability. The duration of time over a specified period that a plant unit is ready to be in service or operational. Available capacity. Equal to the registered maximum stable load (Pmax) of the (aggregate) unit less forced unit outages, scheduled unit outages, derating, generator technical constraints and weather disturbance that cause damage to the unit or that would otherwise limit the units capability to inject power to the grid. XXX XXX XXX Generator Technical Constraint. Refers to plant equipment-related failure limitations encountered during start-up/shutdown procedure, effects of ambient temperature, and resource-related constraints due to the following: a) water elevation and diversion requirements for domestic or irrigation use for impounding hydro plants and water flow from rivers for run-of- river hydro power plants; b) steam quality (chemical composition, condensable and non- condensable gases, steam pressure and temperature) for geothermal plants; c) unavailability of fuel resources that are not within the control of the Generation Company for biomass power plants; and d) steam flow limitations, station load, and electricity demand of its energy host, in the case of the co-generation systems. XXX XXX XXX Projected Output. The loading level nominated by a Generation Company for its must dispatch generating units or priority dispatch generating units === dc2024-01-0003-pages-04.ppm === DC re: Adopting Further Amendments to the WESM Rules and Various WESM Manuals Page 4 of 10 indicating the forecasted output of its must dispatch generating unit or priority dispatch generating unit at the end of a dispatch interval. |n the case of geothermal or impounding hydro plant which is classified as pnority dispatch generating unit, projected output shall refer to its available capacity, as defined in WESM Rules or Market Manual. XXX XXX XXX APPENDICES Appendix A1. Information to be Supplied with Offers to Supply and to Buy Electricity A1.1 Generation Offers Generation offers: a) May include up to ten (10) generation offer blocks per (aggregate) unit, and the maximum combined capacity of generation and reserve offers must not be less than the available capacity of the generator; XXX XXX XXX A1.4 Battery Energy Storage System Offer XXX XXX XXX c) May include up to ten (10) energy offer blocks per (aggregate) unit. The maximum combined capacity of generation and reserve offers must not be less than the available capacity of the generator; XXX XXX XXX Section 2. Amendments to the WESM Manual on Dispatch Protocol. The following provisions of the WESM Manual on Dispatch Protocol are hereby amended: Section 2 Definitions, References and Interpretation 2.1. Definitions XXX XXX XXX 2.1.2. The following words and phrases as used in this Market Manual shall have the following meaning: . Ancillary Service Procurement Agreement. xxx Xxx XXX . Automatic Generation Control (AGC). xxx xxx = Xxx . Automatic Load Dropping (ALD). xxx xxx xxx Bid. XxX XXX XXX Capability. xxx XxX Xxx Cascading Outages. xxx XXX XXX -~oOoadom === dc2024-01-0003-pages-05.ppm === DC re: Adopting Further Amendments to the WESM Rules and Various WESM Manuals Page 5 of 10 Contingency. xxx XXX = Xxx Contingency Reserve. xxx XXX _—-XXX Demand Control. xxx XxX XXX Demand Control Imminent Warning. xxx = Xxx Xxx Dispatchable Reserve. xxx XXX XXX Disturbance. xxx XXX XXX . Frequency Control. xxx XXX = XXX Generator. xxx XXX XXX . Islanding Operation. xxx xxx = Xxx . Islanding Operation. xxx = xxx Xxx . Manual Load Dropping. xxx xxx = Xxx Market Management System (MMS). xxx = Xxx XXX MMS-Market Participant Interface (MPI). xxx xxx Xxx Multiple Outage Contingency. xxx xxx Xxx . Normal State. xxx Xxx = Xxx Offer. xxx XXX = XXX . Operating Margin. xxx xxx Xxx Preferential Dispatch Units. xxx xxx xxx Real-Time Data. xxx xxx = Xxx z. Real-Time Dispatch. xxx xxx Xxx aa. Red Alert. xxx = XxX Xxx bb. Regulating Reserve. xxx xxx Xxx cc. Security. xxx XXX XXX dd. Self-scheduled Nomination. xxx xxx Xxx ee. Shutdown. xxx XXX = XXX ff. Stability. xxx xxx xxx gg. Start-up. The synchronization of a generating unit to the grid from its outage state (closing of generator circuit breakers). hh. System Integrity Protection Scheme (SIPS). xxx XxX Xxx ii. System Operator System Advisories. xxx XXX XXX jj. Voltage Control. xxx xxx xxx kk. Voltage Instability. xxx xxx Xxx Il. Voltage Sag. xxx XxX Xxx K