Alstom wins contract to set up system for power wholesale spot market

The National Transmission Co. (Transco) will award soon to Alstom Philippines Inc. a contract for the supply and installation of a computer system for the operation of the wholesale electricity spot market (WESM).

Under a deregulated environment, electricity will be traded in a spot market, where generators will compete with each other to supply power to a specific grid. The creation of the WESM is expected to result in higher efficiency, transparency in the generation charges and help reduce power rates.

Transco is a spinoff from the Power Sector Assets and Liabilities Management Corp. (PSALM). It manages the transmission assets of the National Power Corp. (Napocor). Both PSALM and Transco were created under the Electric Power Industry Reform Act of 2001 or Republic Act 9136.

The board of Transco approved recently the offer of Alstom which was the highest evaluated bid among the four proposals that were submitted.

The evaluation of the bids was made by a technical working group composed of representatives from Transco and the Department of Energy (DOE)’s independent consultant – Utility Consulting International (UCI).

Eight firms were invited to bid for the contract but only four submitted their proposals, namely: ABB, Alstom, Logica and Siemens.

The entire bidding process was done in accordance with the rules and guidelines of the World Bank, which is the funding agency for the project.

The procurement process was consistent with World Bank’s limited international bidding (LIB) procedure. A single stage, single-envelope bidding process was adopted, which does not include a pre-qualification step. The proposals were evaluated based on a 65-35 percent weight for price and technical components respectively.

Based on the technical bid evaluation done by the TWG and UCI, both Alstom and ABB were able to show a working system that could meet the requirements of the proposed electricity spot market in the country during the on-site demonstration.

But it was Alstom that offered the lowest bid. "The demonstration indicates that Alstom is capable of executing the project and delivering an interim market system within the tight project schedule. Alstom has also proven that their current system have worked in other jurisdiction and will require minimum alterations to comply with the interim market system requirements," UCI report said.

In the opinion of UCI, TWG of Transco, and the Napocor Contracts Awards Committee, the two other bidders-Logica and Siemens, failed to successfully show a working and integrated system by September.

The actual awarding of the contract is expected within this month. With this development, the DOE said the electricity spot market is expected to be operational by September.

The DOE said the rules governing the establishment and operations of the WESM are in the final stages.