Power spot market prices increase as demand surges

MANILA, Philippines — Average electricity spot market prices rose in March as margins thinned with power demand breaching the pre-pandemic level, the Independent Electricity Market Operator of the Philippines (IEMOP) said.

In a virtual briefing yesterday, the IEMOP said average wholesale electricity spot market (WESM) prices increased from P6.19 per kilowatt-hour last February to P6.97 per kwh in March.

The average margin for March decreased by 4.04 percent. The IEMOP observed increasing demand as the country officially entered the dry season mid-March and as more areas were placed under looser quarantine restrictions.

Alert Level 1 was imposed in Metro Manila at the start of March, which was followed by the implementation of a less restrictive alert level status in other provinces that took effect on March 16.

IEMOP data showed the peak demand  was recorded on March 23 at 13,749 MW, surpassing the peak demand in February at 11,985 MW.

It also surpassed the peak demand levels in the same month of 13,181 MW in 2020 and 12,587 MW in 2021, as well as the annual peak demand of 13,450 MW in 2019.

On a per region basis, the same trend was also evident in both Luzon and Visayas. The Luzon peak demand reached 11,617 MW, exceeding the annual peak of 11,307 MW in 2019 and 11,601 MW in 2021.

The Visayas peak demand  amounted to 2,143 MW this month, also breaching the pre-pandemic levels. Peak demand in 2019 was at 2,201 MW.

Despite the increasing demand, the IEMOP said there was sufficient supply levels, which amounted to around 13,456 MW or 5.41 percent higher than the previous month.

This was attributed to the resumption of operations by the generators that were on outage at the earlier periods of the year.

IEMOP chief operating officer  Robinson Descanzo said demand would continue to go up as the days become warmer and the economy reopens further.

“We already entered the summer proper so we will see a higher projection in April. With this trend, the peak we saw in March, we’ll see higher figures in April until May where we project it to reach 12,300 MW in Luzon,” he said.

In terms of supply, IEMOP market simulation and analysis division manager John Paul Grayda said most plants under planned shutdown are hydropower plants, as indicated and approved in the Grid Operating and Maintenance Program (GOMP) of the National Grid Corp. of the Philippines (NGCP).

“In terms of trend, there are still those plants on unplanned outage. For today there is a combination of scheduled maintenance and unplanned outages, and those under forced outage like Sta. Rita, SLPGC. Those under planned maintenance are mostly hydro which is expected,” he said.

Grayda said those under forced outage have technical problems in their equipment.

For the market transactions, the Effective Settlement Spot Price (ESSP) last month amounted to P6.51 per kwh, lower than P7.02 per kwh in January

In the previous month, the spot market transactions accounted for 9.2 percent of all metered quantities or 616 gigawatt-hours (GWh). This is higher than the recorded amount of spot quantities last January which had a 5.1 percent or 302 GWh share of all the transactions.

As the country prepares for the dry season and the upcoming national and local elections, the IEMOP  will closely monitor the market results in line with its commitment to provide transparent, efficient, and reliable market solutions and services that will power a brighter future for every Filipino household.