Napocor’s share in electricity spot market down to 10%

The share of the National Power Corp. (Napocor) at the country’s wholesale electricity spot market (WESM) has been steadily going down due to the continuing privatization  of the National Government of its power facilities.

In a report, the Philippine Electricity Market Corp. (PEMC), operator of the WESM, said the share of Napocor has dropped from 20 percent,  to 10 percent.

PEMC president Lasse Holopainen said if this trend is sustained, there is a strong possibility of increased competition in the market which may also lead to lower prices.

Holopainen noted that the share of government entity, Power Sector Assets and Liabilities Management Corp. (PSALM) at the WESM, has remained at 50 percent even as the member of its trading partners has been reduced from two to three.

“The establishment of Independent Power Producer Administrators (IPPAs) which will handle the trading of Napocor plants which are currently being managed by PSALM, will help keep reflect the competitive prices at WESM,” he said.

He said historically, private power plant owners are aggressive in upgrading and expanding their facilities.

It would be noted that the new owners of power plants previously owned by Napocor have been very vocal of their plans to increase the efficiency of their newly-acquired facilities.

“If power plants are efficiently run, there are chances that more capacities would be traded in the market,” he said.

In the latest report, PEMC said the trading participants in WESM increased to 11  generation traders since the market’s operation in July 2006, with three more participants (First Gen Corp. (Pantabangan/Masiway), SN Aboitiz Power Corp. (Magat hydro power plant), AES’ Masinloc Power, Suez Tractebel’s Calaca Power) registering 1,847 megawatt (MW) of Napocor capacity was privatized.

The report also noted that current generation mix of the country indicaes minimal impact of increasing fuel prices on the market in the second half of 2007 as more hydro power plants are being utilized at this period.

From 11.6 percent in September, the share in the generation mix of hydro power plants increased to 15.9 percent in October and 16.3 percent in November.