ELECTRICITY PRICES on the Wholesale Electricity Spot Market (WESM) rose 3.1% in July as supply margins thinned, the Independent Electricity Market Operator of the Philippines (IEMOP) said on Wednesday.
IEMOP reported that the WESM system-wide average price of power was P3.99 per kilowatt-hour (kWh) in July, against P3.86 per kWh a month earlier.
Between June 26 and July 25, the available supply decreased 3.2% month on month to 20,754 megawatts (MW). Demand fell 5% to 13,812 MW.
The WESM rate in Luzon increased 0.4% to P3.92 per kWh, with supply declining 3.6% to 14,540 MW and demand falling 6.6% to 9,710 MW.
“Despite higher supply margin there was a slight increase in price due to the limited flow of the HVDC (high voltage direct current) from the Visayas to Luzon,” IEMOP said.
The market operator said the spot price in the Visayas rose 11.7% to P4.39 per kWh in July from P3.93 per kWh in the previous month.
Supply fell 4% to 2,530 MW while demand dropped 1.8% to 1,998 MW.
Power rates in Mindanao increased 7.2% to P3.80 per kWh from P3.54 per kWh a month earlier.
The grid’s available supply decreased 1% to 3,685 MW. Demand grew 0.4% to 2,104 MW.
IEMOP said that the price increase was due to the limited HVDC flows and coal plant outages, leading to high-cost generators clearing the market.
“Having a limited power flow from Mindanao to the Visayas and from the Visayas to Luzon, and with cheaper plants on outage… resulted to higher energy prices across the regions,” IEMOP said.
For the August supply month, the market operator is expecting an increase in the WESM price with several power plants going on forced outage, affecting supply.
“We expect increase in price, but hopefully it won’t be as high as it was last year,” Isidro Cacho, Jr., IEMOP’s head of corporate strategy and communications, said in a virtual briefing.
Since Aug. 4, the Visayas grid has been on yellow alert due to high system demand and with power plants either derated in capacity or going on forced outage.
“So our fearless projection is that (the price) will range between P4.50 and P5 per kWh on average. Earlier, we did some calculations and saw a 40-centavo increase for the Visayas, in particular,” Mr. Cacho said.
Meanwhile, power prices in Luzon will be more or less unchanged, while rates in Mindanao may increase between 27 to 28 centavos.
IEMOP operates the WESM, where energy companies can purchase power when their long-term contracted power supply is insufficient for customer needs. — Sheldeen Joy Talavera