MANILA, Philippines — Prices at the wholesale electricity spot market(WESM) have declined in the first half of October as demand for electricity waned due to rains and lower temperatures brought by the La Niña weather phenomenon, the Independent Electricity Market Operator of the Philippines (IEMOP) said.
In a virtual press briefing, IEMOP manager for pricing validation and analysis John Paul Grayda reported that system peak demand decreased to 12,259 megawatts (MW), a 5.4 percent drop from 12,956 MW in the same period last year.
This resulted in WESM prices declining to P2.19 per kilowatt-hour (kwh) in the first half of October.
On a regional level, Luzon peak demand was recorded at 10,303 MW while Visayas peak demand was at 2,008 MW.
The IEMOP said supply generally remained sufficient although price spikes were encountered in the first week of October as a result of the planned outage of the Leyte-Luzon HVDC interconnection, which limited the flow of power between the Luzon and Visayas grids.
Grayda said the downtrend in prices may continue moving forward, given the forecast of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) that the La Nina may last until the first quarter of 2021.
The IEMOP also reported that for September, the effective spot settlement price increased to P3.88 per kwh, attributable to the occurrence of price spikes as generator outages affected the supply levels.
“Supply levels started to decrease last Sept. 4, thereby depleting the margin in Luzon and Visayas with several generating plants that are de-rated, on scheduled maintenance and on forced outage,”the IEMOP said.
The largest capacity outage of 2,945 MW was recorded on Sept. 7, of which 1,752 MW were planned outages while 1,194 MW were forced outages.
“The thin supply margin resulted in an increase in market price with the load weighted average price (LWAP) reaching as high as P36.20 per kwh for a single interval,”the IEMOP said.
System peak demand for September exceeded its 2019 peak demand by 1.3 percent.
The IEMOP earlier reported that Luzon peak demand reached 10,563 MW in September, higher than the 10,260 MW recorded during the same period a year ago.
Overall generation mix during the period was dominated by coal plants which provided 58.4 percent of the energy requirement, followed by natural gas plants at 21.1 percent, while geothermal plants contributed 11.3 percent and hydro plants provided 5.2 percent of the total generation.
Moreover, the IEMOP reported that it has successfully completed its preparations for the Enhanced WESM Design and Operations on Sept. 30.?
“With the completion of the critical performance testing and fine-tuning activities, the New Market Management System and the Central Registration and Settlement System are now ready for commercial use,”it said.
This completes the preparations of IEMOP for the Go-Live, which also included the achievement of the reliability standard for the market systems,?software audit certification for the new market systems, deployment of enhancements, continuous availability of the market interfaces, conduct of trainings, and the implementation of the parallel operations program.
“While we endeavor to have the Go-Live?on?Dec. 26, this is still subject to the approval of the Department of Energy (DOE),”the IEMOP said.
Other prerequisites for full commercial operations are the ongoing policy and regulatory approval as well as market participants’ readiness.
The IEMOP services as the independent market operator (IMO) of the WESM.