MANILA, Philippines — Wholesale electricity spot market (WESM) prices inched higher this month as the warmer weather and looser restrictions push up demand while outage of power plants reduced supply.
The Independent Electricity Market Operator of the Philippines (IEMOP) recorded an increase in the spot price at the start of March, reaching an average of P4.23 per kilowatt-hour (kWh), compared to previous billing month’s P2.22 per kWh.
The market operator said this was largely attributed to the gradual surge in demand as the economy continues to recover from the restrictions brought about by the COVID-19 pandemic and as changes in the weather ensue due to the approaching dry season, as well as generator outages.
“We see some high prices, particularly early March, from March 1 to 16, and March 16 to 17 due to increase in demand and generator outages,” IEMOP market simulation and analysis division manager John Paul Grayda said in a briefing Friday.
“Demand is increasing because of warmer temperature and at the same time, increasing economic activities of different industries and commercial sector,” he said.
Despite the generator outages and hotter weather conditions, the IEMOP said supply levels remain to be generally sufficient to support the demand requirements – which only had an increase of around 9.2 percent in comparison to the previous month.
IEMOP data showed demand increased by nearly 1,000 megawatts (MW) from 11,485 MW in February to 12,476 MW as of March 17.
On a per grid basis, demand rose from 9,544 MW to 10,340 MW for Luzon, and 1,941 MW to 2,136 from Visayas from the months of February and March, respectively.
On a year-on-year basis, the Luzon and Visayas demand remained lower than the 2020 level, which was at 13,181 MW.
As a result of hotter temperature and outage of plants, IEMOP revised its summer outlook in terms average spot market prices.
Grayda said WESM prices are still expected to hover at around P2 per kwh, but slightly higher than the previous month’s simulation.
Based on IEMOP’s projection, the average WESM price in April may rise from P1.80 per kwh to P2.22 per kwh, from P2.13 per kwh to P2.69 per kwh in May, and from P2.10 per kwh to P2.65 per kwh in June.
The outlook considers the generator outages as laid down in the grid operating program for the summer period and are subject to emergency outages, government response to the COVID-19 pandemic, as well as occurrences of other force majeure events.
In the event some power plants undergo unscheduled outage, the IEMOP also simulated the supply, demand and WESM prices with an additional 1,000-MW unplanned maintenance during the dry months.
Based on IEMOP’s projection, the projected average WESM price may rise from P4.42 per kwh to P5.10 per kwh in April, from P5.52 per kwh to P6.94 per kwh in May, and from P6.26 per kwh to P7.42 per kwh in June.