Power spot market prices drop further

MANILA, Philippines — Wholesale electricity spot market (WESM) prices continued to drop further in September due to cooler weather, bringing third quarter rates on a downtrend, the Independent Electricity Market Operator of the Philippines (IEMOP) said yesterday.

In a virtual briefing yesterday, IEMOP market simulation and analysis division manager John Paul Grayda said average prices until Sept. 21 was only P3.10 per kilowatt-hour (kWh), lower than the average price of P4.76 per kWh in August.

The decline was attributed to ample supply, mostly from coal power plants, and a 2.83 percent decrease in demand from 10,111 megawatts (MW) in August to 9,824 MW in September.

There’s a downward trend already when it comes to prices from July to August and towards September, we observed prices are still on a downward trend. This is attributed to conditions at that time,” IEMOP market information modelling manager Edward Olmedo said.

Apart from the supply-demand data, the country experienced intermittent rains in September, IEMOP chief operating officer Robinson Descanzo said.

“In terms of residential use, (demand) is tempered because of the rainy days we experience,” he said.

However, the system peak demand increased slightly on a month-to-month comparison from 12,272 MW to 12,481 MW.

On a per region basis, peak demand for Luzon increased by 186 MW from the previous’ months record of 10,265 MW contrary to that of the Visayas grid which decreased by 51 MW from 2,140 MW.

On the other hand, the effective settlement spot price (ESSP) decreased from P7.12 per kWh in July to P5.13 per kWh in August.

The downward trend has been observed since June given the persisting colder weather conditions. The total spot percentage also decreased  by 9.6 percent to 8.6 percent.

Generation for the August spot transactions was  6,989 gigawatt-hours (GWh).

Prices in Visayas were also affected by congestion due to the outage of a damaged Cebu-Negros submarine cable.

The Energy Regulatory Commission issued an order on Sep. 20, suspending collection of congestion charges, which IEMOP is currently working to implement.

On a year-on-year basis, the August ESSP showed an increase from P2.05 per kwh last year, as stricter quarantine protocols during the month dampened demand last year at 6,474 MW compared to 6,989 MW this year.