MANILA, Philippines - More customers sourced power from the wholesale electricity spot market (MWESM) as prices plummeted to six-year lows in January, based on data from the Philippine Electricity Market Corp. (PEMC).
In a statement yesterday, PEMC said effective settlement spot prices (ESSPs) at the WESM plunged to P1.90 per kilowatt-hour (kwh) for the January billing period, the lowest since January 2011.
ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.
The resulting prices resulted in customer confidence, thereby augmenting their supply sourced from the WESM wherein wholesale customers sourced 23 percent of their electricity requirements from the electricity bourse for the January 2017 billing period.
PEMC said this was the highest percentage customers sourced from WESM since December 2006.
“The result (of the drop in prices) is how much was bought at the market, that’s the highest spot quantity…we believe that shows competitive pricing being given by WESM,” PEMC corporate planning division manager Isidro Cacho said in a briefing yesterday.
Over the past three years, WESM prices have been steadily declining – from P5.58 per kwh in 2014, P4.46 per kwh in 2015 and P3.33 per kwh in 2016, PEMC data showed.
The decline in prices was due to the notable market reforms and developments that ushered in transparency and competition in the electric power industry, Cacho said.
He said mitigating measures in place address price spikes such as lowering of offer price cap from P62,000.00 per megawatt-hour to P 32,000.00 per mwh and the imposition of secondary price cap mechanism.
PEMC has also complied with its task in changing the market rules to reflect the preferential dispatch status for emerging renewable energy resources as mandated by the Renewable Energy Act of 2008, and is recognized as the pioneering effort in Asia.
It said registered capacity of preferential dispatch resources in the WESM totals to 1,356.6 megawatts (MW).
Preference in the dispatch of emerging renewable energy resources has been implemented with solar, wind and run-of river hydro resources classified as must dispatch generating units while FIT-entitled biomass are accorded priority dispatch generating units.
The spot market operator has also streamlined the approval process in market membership from 15 days to five days, Cacho said.
Starting with six market participants, PEMC now has 280 participants as of March 2017.
“The WESM has been an aid to the economic growth of the country and developments in the electric power industry. More than the competition, supply augmentation, investment simulation, and advancements that the WESM has contributed in nation-building, the WESM boasts years of integrity through transparency,”PEMC president Melinda Ocampo said.