MECQ prompts huge drop in Luzon power demand

MANILA, Philippines — The Independent Electricity Market Operator of the Philippines (IEMOP) has noted a 700-megawatt (MW) drop in Luzon’s power demand as Metro Manila and nearby provinces shifted back to modified enhanced community quarantine (MECQ).

In a virtual briefing, IEMOP chief operating officer Robinson Descanzo said average power demand decreased in Metro Manila, Bulacan, Cavite, Laguna and Rizal mainly due to the impact of the intensified lockdown in those areas.

From July 26 to Aug. 3, or a week before the MECQ, IEMOP data showed peak demand reached 12,229 MW.

But from Aug. 4 to 9, or in the first week of MECQ, peak demand was only at 11,533 MW.

“With the reduction in commercial activities, peak demand was observed to decrease by 696 MW for the first week of MECQ in comparison to the two weeks prior to its resumption,” Descanzo said.

President Duterte again placed the National Capital Region (NCR) and the provinces of Bulacan, Cavite, Laguna, and Rizal under the MECQ from Aug. 4 to 18 following the clamor raised by the medical frontliners.

With NCR and nearby provinces placed under MECQ for more than half of the month, IEMOP projects spot market prices to decrease to P1.99 per kilowatt-hour (kwh) from P2.08 per kwh the previous month.

If MECQ is shifted to general community quarantine (GCQ) in the affected areas, IEMOP sees power demand increasing by about 500 MW, which will be sustained until the end of the year, due to resumed economic activity and cooler temperatures.

“If we graduate from MECQ to GCQ, we are looking again at maybe around 500 MW increase, and that will be sustained toward the Christmas season because of other economic activities expected during this period,” Descanzo said.

On a year-on-year comparison, IEMOP data showed peak demand of 12,229 MW in the beginning of August this year was close to the August 2019 level of 12,653 MW.

“The peak demand is gradually approaching its 2019 demand levels with only a 3.4 percent or 424 MW difference from the previous year particularly for the month of August 2020,” Descanzo said.

Meanwhile, the effective settlement spot prices (ESSPs) remained low this year due to the impact of the coronavirus pandemic on economic activity.

“Overall, given the limited operations of establishments and industries, market prices remained low despite some intervals with price spikes which were attributed to supply restrictions and plant outages as noted previously,” Descanzo said.

Meanwhile, IEMOP said it continues to deliver efficient market management and services despite the ongoing implementation of the community quarantine in various areas in Luzon and Visayas.

“Through its utilization of online platforms, the market operator remains in constant coordination with its participants and stakeholders as it apprises them on the market results of the wholesale electricity spot market (WESM) as well as the latest developments within the power industry,” it said.