Power spot market prices jump in June

MANILA, Philippines — Electricity prices in the spot market went up in June amid tight supply, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

The Wholesale Electricity Spot Market (WESM) rate rose by 23 percent to P9.56 per kilowatt-hour in June from the previous month’s P7.79 per kWh.

The spot price increased despite the declines in both overall demand and supply.

In particular, demand went down by 1.9 percent to 15,454 megawatts in June from the previous month’s 15,755 MW.

Similarly, supply dipped by 1.1 percent to 21,133 MW from 21,374 MW.

“This (higher price) was primarily driven by localized tight supply conditions and reserve deficiencies,” Rica Cagnayo, trading operations for market simulation and analysis staff at IEMOP, said in a press briefing yesterday.

The Visayas posted the highest increase in WESM prices, which rose by 42 percent to P14.46 per kWh in June from the previous month’s P10.20 per kWh.

“In Visayas, continued forced outages and increasing demand tightened supply conditions, resulting in grid alert issuances and driving average market prices higher,” Cagnayo said.

In Mindanao, spot prices climbed by 38 percent to P12.75 per kWh from P9.28 per kWh.

As for Luzon, WESM prices went up by 13 percent to P7.95 per kWh from P7.02 per kWh.

Higher spot prices are expected to be reflected in electricity bills this month.

Isidro Cacho Jr., vice president for trading operations at IEMOP, said  the Visayas is expected to see the biggest impact.

“The spot exposure there varies per island. But based on our data, on average, around 30 percent of supply in the Visayas comes from the spot market,” he said.