# DC2015-03-0001 — Must Dispatch and Priority Dispatch Framework **Department Circular No. DC2015-03-0001** Promulgating the Framework for the Implementation of Must Dispatch and Priority Dispatch of Renewable Energy Resources in the Wholesale Electricity Spot Market Issued: March 20, 2015 Secretary: Carlos Jericho L. Petilla --- ## WHEREAS Clauses - RA 9136 (EPIRA) §2 declares state policy to promote RE resources in power generation and reduce import dependence; §37 mandates DOE to encourage private investment in RE. - RA 9513 (RE Act) §2 declares state policy to: (a) accelerate exploration of RE to achieve energy self-reliance and reduce fossil fuel dependence; (b) increase RE utilization through fiscal and non-fiscal incentives; (c) encourage RE to prevent harmful emissions. - RE Act §5: DOE is lead agency for RE Act implementation; EPIRA §37 empowers DOE to supervise power industry restructuring. - RE Act §7: FIT system for electricity from wind, solar, ocean, run-of-river hydro and biomass. - RE Act §20: qualified and registered RE generating units with intermittent RE resources shall be considered "Must Dispatch" based on available energy and shall enjoy priority dispatch. - Implementation of Must Dispatch and Priority Dispatch requires guidelines ensuring maximum injection of intermittent and FIT-eligible generation while maintaining system security. - DOE spearheaded public consultations on Guidelines for RE Integration in WESM in various regions. --- ## PART 1 — GENERAL PROVISIONS ### Section 1. Scope and Application This Circular applies to all agencies and entities named herein and all electric power industry participants in the country. ### Section 2. Purposes This Circular is issued to: (a) Define Must Dispatch and Priority Dispatch pursuant to the RE Act, including the high-level process for the qualification, certification, and registration of generating units designated as Must Dispatch and Priority Dispatch (collectively: **Preferential Dispatch Generating Units**); and (b) Provide the framework for the integration in the WESM of Preferential Dispatch Generating Units consistent with the goals of EPIRA and the RE Act. ### Section 3. Statement of Policy Pursuant to the RE Act, intermittent RE resources including FIT-eligible generation shall be allowed to maximize injection to the grid while: (a) Maintaining system security at all times; (b) Maintaining economically efficient short-run dispatch of energy and ancillary services; and (c) Holding WESM participants to account for what they are able to control. ### Section 4. Definitions **(a) "Must Dispatch"** — facilitated in the WESM by qualified and registered **intermittent RE-based plants**, whether or not under the FIT system: wind, solar, run-of-river hydro, or ocean energy. Dispatched according to preference in the dispatch schedule whenever generation is available. The intermittent basis of Must Dispatch rests on the difficulty of precisely predicting RE resource availability, making generated energy variable, irregular, and inherently uncontrollable — pursuant to RE Act §20. **(b) "Priority Dispatch"** — giving preference to **biomass plants under the FIT system** in the dispatch schedule pursuant to RE Act §7. Collectively, Must Dispatch and Priority Dispatch plants are referred to as **Preferential Dispatch Generating Units**. --- ## PART 2 — QUALIFICATION AND REGISTRATION ### Section 5. Qualification and Registration of Preferential Dispatch Generating Units Pursuant to RE Act §26, the DOE shall issue certifications to qualified RE developers entitled to avail of RE Act incentives. Such certification, together with the Certificate of Compliance (COC) issued by the ERC for generating facilities availing of preferential dispatch, shall be used for WESM registration. --- ## PART 3 — RESPONSIBILITIES ### Section 6. Responsibilities of PEMC (a) Undertake necessary amendments in the WESM Rules and Market Manuals to implement Must Dispatch and Priority Dispatch of eligible RE plants in the WESM. (b) Formulate procedures on the qualification and registration of Preferential Dispatch Generating Units in the WESM. (c) Monitor compliance of intermittent RE generation companies on the submission of projected output for each generating unit pursuant to the WESM Rules and on approved forecast accuracy standards consistent with the Philippine Grid Code (PGC). Annual compliance shall be reported to the PEM Board and the DOE. (d) Conduct information campaigns on the implementation of Must Dispatch and Priority Dispatch in the WESM. (e) Jointly with the NGCP, implement technical mitigation measures and improvements in the system to ensure safety and reliability of electricity transmission. ### Section 7. Responsibilities of NGCP (a) Determine, through technical and economic analysis, the **maximum penetration limit** of intermittent RE-based power plants or Must Dispatch generating units to the grid, in consultation with stakeholders. (b) Ensure maximum dispatch of generation from intermittent RE plants in accordance with the PGC, subject to the availability of sufficient operating reserves. NGCP is enjoined to obtain sufficient operating reserves at all times. (c) Jointly with PEMC, implement technical mitigation measures and improvements in the system to ensure safety and reliability. (d) Require and witness the conduct of technical tests to ensure generators' compliance with PGC performance standards. (e) Produce and submit to PEMC the **RE aggregated generation forecast** for each interconnected system it operates. Forecasts shall cover at least 24 hours and shall be updated at least once every trading period as indicated in the WESM Rules. (f) Endeavor to operate Must Dispatch generating units in **free active power production control mode**. However, if NGCP considers it necessary for redispatch to maintain grid security and reliability, NGCP may instruct intermittent RE-based generators to change Active Power or effect immediate disconnection, as prescribed in the PGC. (g) Submit to PEMC an operational report including all instructions issued to generators that resulted in a change in active power production. (h) Determine and incorporate in the **Transmission Development Plan** the necessary upgrading of transmission facilities to ensure non-discriminatory access of all grid-connected Preferential Dispatch Generating Units. *Note: "Intermittent RE resources" is defined under RE Act §20, also referred to as intermittent RE-based power plants or Must Dispatch generating units, which include variable RE resources (VRE) as described in the revised PGC.* ### Section 8. Responsibilities of Distribution Utilities (a) Determine and incorporate in the **Distribution Development Plan** the necessary upgrading of distribution facilities to ensure non-discriminatory access of all embedded Preferential Dispatch Generating Units. (b) Ensure that embedded Preferential Dispatch Generating Units shall be given **priority to inject** into the distribution network. ### Section 9. Compliance with WESM Rules All Preferential Dispatch Generating Units shall strictly comply with: (a) Submission of projected output for each generating unit for each trading interval in each trading day, per the timetable; (b) Revision of projected output for any trading interval if they no longer represent a reasonable estimate of: (i) expected availability; or (ii) offers likely to apply for real-time dispatch optimization; and (c) Other relevant provisions of the WESM Rules and Market Manuals as may be established or revised in relation to preferential dispatch. ### Section 10. Dispatch Prioritization PEMC and NGCP, jointly and in consultation with WESM Members, shall update the Dispatch Protocol in the WESM Rules and Market Manuals to consider the following **hierarchy of dispatch schedule and implementation**: | Priority | Category | |---|---| | 1 | Minimum stable load (Pmin) of all Conventional Generating Units | | 2 | Must-Dispatch Generating Units | | 3 | Priority Dispatch Generating Units | | 4 | Non-scheduled Generating Units | | 5 | Scheduled Generating Units | Notwithstanding the hierarchy, NGCP shall always consider technical parameters and limitations of transmission facilities, giving priority to grid reliability and security during dispatch implementation. **Constrained corridor rule:** In case Preferential Dispatch Generating Units are connected to a common constrained transmission facility, the following hierarchy shall apply: (a) Preferential Dispatch Generating Units under commissioning and testing; and (b) Pro-rated sharing based on available transmission capacity and Day-Ahead Generation Forecast of all Preferential Dispatch Generating Units. --- ## PART 4 — TRANSITORY PROVISIONS ### Section 11. Interim Protocol Taking into account line limitations and loading at NGCP substations, PEMC and NGCP shall develop an **Interim Protocol** for the dispatch of Preferential Dispatch Generating Units to address prioritization of existing and upcoming wind power projects. The Interim Protocol shall be submitted to the DOE within **ten (10) days** from effectivity of this Circular. --- ## PART 5 — FINAL PROVISIONS ### Section 12. Fines and Penalties All Preferential Dispatch Generating Units shall comply with the WESM Rules and Market Manuals; failure shall subject them to the investigation process under the WESM Rules. Any violation of this Circular shall be subject to administrative fines and penalties to be developed by the DOE pursuant to RE Act §36. ### Section 13. Regulatory Support The ERC shall ensure the provision of support in regulatory requirements, particularly in the promulgation of the amended PGC and PDC (Distribution Code) for consistency with the RE Act and EPIRA. ### Section 14. Retroactive Effect Consistent with RE Act §20, the effects of the incorporated guidelines for Must Dispatch and Priority Dispatch in the WESM Rules shall **retroact to the date of the effectivity of the RE Act** insofar as the intended incentives given to Preferential Dispatch Generating Units are concerned. ### Section 15. Amendatory Clause Provisions of other department circulars inconsistent with this Circular are hereby repealed, amended, or modified accordingly. ### Section 16. Separability Clause If any section or provision is declared unconstitutional or invalid, such parts not affected shall remain in full force and effect. ### Section 17. Effectivity This Circular shall take effect immediately upon publication in two (2) newspapers of general circulation and will remain in effect until otherwise revoked by the DOE.