Power spot market prices likely lower this month – IEMOP

MANILA, Philippines — Average electricity spot market prices for Luzon and Visayas are likely to go down this month due to lower demand and higher supply.

The Independent Electricity Market Operator of the Philippines (IEMOP), the operator of the  Wholesale Electricity Spot Market (WESM), reported  a decline in the average electricity spot market prices during the first two weeks of the June billing month.

IEMOP data showed that the average WESM price in Luzon and Visayas recorded a P1.73 per kilowatt-hour (kWh) reduction during the first two weeks of the June billing period from P8.83 per kWh in May.

It attributed the decline to a notable jump in the average supply margin, which stood at 2,833 megawatts.

It said the higher supply margin indicates improved market conditions, with an adequate electricity supply available to meet consumer demand.

IEMOP cited as a significant development in the transmission system the recent energization of the Balsik-San Jose 500-kilovolt transmission line, which has alleviated  previous constraints in power flow from Bataan to Bulacan that had caused limitations in supplying power to Metro Manila.

With the energization of the line, IEMOP said congestion  in the area has been addressed, and market participants can expect a more stable and predictable pricing environment.

IEMOP said operations have also resumed at the Ilijan power plant in Batangas to further augment the energy supply for June.

This comes as a response to the rapidly increasing demand, ensuring a more robust energy supply for June and beyond, it said.

IEMOP corporate strategy and communications head Isidro Cacho said there is a strong chance for spot market prices to remain at the P7 per kWh level throughout the month with a downward trajectory of demand given the cooler temperature.

“So in terms of demand, it is going down, and supply has increased. That means we have a larger supply margin,” Cacho said.

“Barring any unforeseen or unplanned or forced outage, I think the current price levels will possibly be maintained. There is a high probability that it will stay at the P7-level as opposed to the almost P9 the previous month. What that means is the electricity that our distribution utilities buy in the spot market will be lower in price compared to the previous month,” he said.

In Mindanao, a similar downward trend in spot market prices has also been recorded so far this month, with the average WESM price decreasing to P3.29 per kWh from P6.21 per kWh the previous month, according to IEMOP.