Maturing into its ten years of commercial operations, the Wholesale Electricity Spot Market (WESM) has seen its share of volatility and regulatory intervention. Spot prices in WESM have been strongly driven by events, spiking on an almost annual basis on plant maintenance shutdown, typhoons, or fuel shortages. Volatile spot market prices which are susceptible to market power problems make up the physical characteristics of an electricity market. This behaviour of electricity prices is due to the fact that electricity is scarcely storable. With limited storage capacity such as reservoir hydropower plants and pump storage facilities, the consequences of this non-storability is evident in the enormous price fluctuations which can be observed in most electricity markets.
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