Power spot market prices nearly halved in Sept

MANILA, Philippines – Ample supply and cooler temperatures drove Wholesale Electricity Spot Market (WESM) rates down by nearly half as of end-September.

In a statement, the Philippine Electricity Market Corp. (PEMC) said there was a considerable dip in the final effective settlement spot prices (ESSPs) for the September 2016 billing period at P2.86 per kilowatt-hour from P4.17 per kwh the previous month.

ESSPs refer to the average prices paid by customers for energy bought from the spot market, which is operated by PEMC.

The continued drop in WESM prices was attributed to adequate power generated by power plants, coupled with cooler temperature which brought down demand.

“Based on our assessment, the dip in market prices is due to confluence of increased supply due to higher availability of generating units and lower demand attributable to colder temperature,” PEMC training and communications manager Philip Adviento said in a text message.

For the month of October, Manila Electric Co. (Meralco) announced electricity rates declined by P0.1216 per kwh, the third straight month on the downtrend, due to lower transmission and generation charges.

Lower WESM charges offset the increase in independent power producers (IPPs) and power supply agreement (PSA) costs and pulled down the generation charge.

There was also a marked improvement in electricity sold at the spot market, WESM settlement data showed.

For the supply month, about 15.09 percent of total market transactions were sourced from electricity market while the remaining 84.91 percent were procured through power supply agreements.

“The September billing period showed a marked increase in the share of electricity bought in the spot market compared to the monthly average of 8-10 percent sourced by wholesale customers. WESM truly works as it provides a viable option for wholesale customers in the provision of electric supply to end-users,” PEMC president Melinda Ocampo said.

WESM data also showed coal is still the dominant fuel in the generation mix at 49.33 percent, followed by natural gas at 25.8 percent. Supply from oil-based sources was at 1.5 percent.

Among renewable energy sources, geothermal has the highest share at 12.5 percent while hydropower supplied a total 7.7 percent (run-of-river at 0.2 percent and non run-of-river at 7.5 percent). Emerging RE technologies such as solar, wind, run-of river hydro and biomass contributed around 3.7 percent.