Power spot prices hit 5-year low

MANILA, Philippines - Prices at the country’s electricity spot market hit a five-year low in November due to the continued stability of power supply and lower demand caused by cooler temperature.

The Philippine Electricity Market Corp. (PEMC) announced yesterday its effective settlement spot prices (ESSPs) on the wholesale electricity spot market (WESM) in November dipped to P2.27 per kilowatt-hour (kwh), the lowest since January 2011.

ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.

“The decrease in WESM prices was driven by higher energy volume offers in the market and colder temperature,” PEMC president Melinda Ocampo said. “Such a sharp decline in the market prices is welcome as long as wholesale customers like distribution utilities pass on the historically low market prices to their end-users.”

In terms of billing, 19 percent of total energy transactions were sourced from the spot market while the 81 percent were supplied through bilateral contracts.

The amount wholesale customers sourced from the market is the highest since March 2009.

For the month, market data reflected coal resource accounted for 47.42 percent of the generation mix while natural gas and diesel/oil made up 25.44 percent and 0.89 percent, respectively.

Meanwhile, renewable energy resources contributed 26.25 percent, broken down into 12.49 percent for geothermal, 9.25 percent for hydropower, 2.16 percent for wind, 1.4 percent for solar and 0.95 percent biomass.

For the whole year, WESM prices have been on a downtrend. The trend is expected to continue in the early part of 2017 as cooler temperature will continue in January and February, Ocampo said.

There is also adequate capacity from old and new power generators, particularly from renewable energy projects, she said.

“You can see that there is a lot of available capacity at this time,” Ocampo said. “RE also has a big impact in lowering prices, because of the must dispatch and priority dispatch (order).”

The coming year will also see PEMC’s involvement in the full implementation of retail competition and the establishment of WESM in Mindanao, the PEMC official also said.

“The recent developments in the electricity market underpin PEMC’s efforts in establishing a competitive, efficient, transparent and reliable market where prices are governed as practicable by commercial and market forces,” Ocampo said.