THE Department of Energy (DoE) said on Thursday that geothermal, biomass, and hydroelectric power plants have been designated preferred dispatchers of power on the wholesale electricity spot market (WESM).
Energy Secretary Raphael P.M. Lotilla said in a statement that giving preferential dispatch will encourage investment in additional capacity for the three types of renewable plants “because of guaranteed dispatch to the grid at their full available capacities under merchant pricing, allowing recovery of investment.”
WESM is the market for power not committed under long-term supply contracts, which command a premium relative to power procured under long-term deals.
The DoE defines priority dispatch as preferential treatment for qualified and registered RE plants.
The department classifies as “must dispatch” generating units that use intermittent renewable energy (RE) sources such as wind, solar, run-of-river hydro or ocean energy. This classification applies whether or not the plant participates in the feed-in tariff (FIT) system, which provides eligible RE plants fixed tariffs for 20 years.
A previous DoE circular classified solar, wind, and run-of-river as must dispatch, with biomass enjoying FIT.
“Granting all generating units utilizing RE resources either ‘must dispatch’ or ‘priority dispatch’ (status) will aid in accelerating the development and utilization of indigenous RE resources and reduce the dependence on imported conventional energy sources,” Mr. Lotilla said.
Mr. Lotilla said greater reliance on domestic RE will minimize exposure to global fuel price fluctuations.
In the new circular, the DoE has also authorized WESM, the system operator, and distribution utilities to make necessary amendments to the WESM rules and manuals to ensure the efficient and effective scheduling of preferential dispatch generating units. — Ashley Erika O. Jose