ABB is now busy implementing the Philippines wholesale electricity spot market, WESM, system which will begin operations in January 2005. Norway’s Navita is subcontracted by ABB for a back-office solution to the system
The contract, worth more than USD 8 million, between the engineering multinational and the government of the Philippines was signed this spring.
“ABB is a world leader in this market and number one in Asia. We have already a similar installation in Korea and are supplying the first such system in China,” says Mr Magnus Wibling, President and Country Manager ABB Philippines. “In fact the order went to a division of ABB in Santa Clara, California, who developed the technology at the largest such power markets in North America and Europe. Our role as the local ABB company in this project is quite limited. Many Department Of Energy staff on the WESM project is currently in California for training and systems acceptance testing.”
A power trading exchange is part of the provisions set forth in the Electric Power Industry Reform Act (EPIRA) which aims to bring down power rates in the Philippines and to attract foreign investment into the power sector.
Electricity prices in the Philippines are currently among the highest in Asia and the National Power Corporation is carrying a huge debt burden that has to be restructured. The implementation of a wholesale electricity spot market is seen as a vital step in this reform process.
“We are pleased that ABB, which is known for utilizing proven technology in power market operations, will be implementing this nationally critical power system,” said Philippine’s Energy Secretary Vincent S. Perez in a comment to the assignment given to ABB.
Power distributors will be required by law to purchase at least ten percent of their power requirements from the spot market launched next January and generation companies will sell power based on these conditions.
The government hopes WESM will create cheaper energy, a transparent market and more knowledgeable buyers and sellers.
Norwegian software firm Navita was awarded a subcontract from ABB to deliver its POMAX back-office settlement solution to the WESM.
The Norwegian package will support meter data administration, settlement and invoicing of the market participants every day for more than 50 different electricity products and charge types.
This follows the successful delivery of this settlements system to the Korean Power Exchange last year, also under a subcontract to ABB.
Day to day management of WESM will be made by Marketplace Company Pty
Limited of New Zealand which was awarded a USD 1.8 million consultancy
services contract for the management of WESM.
The Asian Development Bank and the Japan Bank for International Cooperation
provide the funding for this venture through their Electricity Market and
Transmission Development Project.
