Power prices sizzle on higher demand

MANILA, Philippines — The average spot market prices in Luzon and Mindanao rose so far this month as sticky high heat indexes pushed up demand, according to the Independent Electricity Market Operator of the Philippines.

IEMOP said the average wholesale electricity spot market (WESM) prices for Luzon and Mindanao as of May 19 increased on a monthly basis as demand continued to rise amid hotter temperatures.

The average power price in the Luzon spot market as of May 19 reached P7.88 per kilowatt-hour (kWh), higher than the average price of P6.63 per kWh in the April billing period.

The average power supply in Luzon reached 14,144 megawatts (MW), six percent higher than previous month’s 13,307 MW supply.

However, demand in Luzon during the same period rose at a faster rate of 10 percent to 11,348 MW from 10,310 MW.

On the other hand, the electricity spot market prices in Mindanao averaged P6.98 per kWh, 8.5 percent higher than last month’s P6.41 per kWh average price.

The island region’s average supply so far this month reached 3,218 MW, down from last month’s 3,551 MW. Demand in Mindanao, however, is up at 2,140 MW from 2,063 MW average requirement in April billing.

Spot market prices of power in Visayas, meanwhile, eased so far this month compared to the April average due to higher supply from Mindanao and better transmission in the grid.

The average spot market price of power in Visayas stood at P8.43 per kWh lower than the previous billing period’s P8.73 per kWh average price.

Visayas is seeing better supply this month, averaging at 2,425 MW, up from last month’s 2,349 MW, allowing its grid to meet the rising demand in the island region. Demand in Visayas is averaging so far at 2,162 MW versus last month’s 2,002 MW.

Isidro Cacho Jr., IEMOP’s vice president for trading operations, attributed the easing in the prices in Visayas market to improved supply from Mindanao and better transmission in the grid.

Power prices in the spot market are expected to go down once La Nina or the rainy season begins as a result of higher supply in hydropower plants coupled by easing demand for electricity in line with historical trend, according to IEMOP.

“Every year that is expected as demand will go down when we transition to the wet period. The expectation is once heat gradually lowers down the (electricity) consumption will [also] be lower,” said Arjon Valencia, corporate planning and communications manager of IEMOP.