WESM rates higher as Christmas nears

MANILA, Philippines — After a four-month decline, the average price of electricity in the Wholesale Electricity Spot Market (WESM) rose in October, driven by increased demand ahead of the Christmas season.

According to the Independent Electricity Market Operator of the Philippines (IEMOP), system-wide WESM rates increased by 13.1 percent to P4.39 per kilowatt-hour from P3.88 per kWh in September.

At a media briefing yesterday, Chris Warren Manalo, assistant manager for market simulations and analysis at IEMOP, traced the rate hike to a slight increase in system demand and weaker supply due to plant outages.

Operated by IEMOP, WESM is the centralized venue for trading electricity as a commodity where prices are determined by supply and demand.

For the Sept. 26 to Oct. 25 billing period, overall supply dipped by 2.2 percent to 19,897 megawatts from 20,348 MW, while demand inched up by two percent to 13,972 MW from 13,700 MW.

The supply margin, or the difference between the available supply and the actual demand, narrowed by 10.9 percent to 5,925 MW from 6,648 MW on a monthly basis.

By region, the average spot market price in Luzon edged 2.4 percent higher to P3.89 per kWh from P3.80 per kWh.

Supply slipped by 2.4 percent to 13,979 MW from 14,327 MW, while demand inched up by 1.7 percent to 9,915 MW from 9,746 MW.

This resulted in a supply margin of 4,064 MW for the month, lower than the 4,581 MW reported previously.

In the Visayas grid, the average WESM rate surged by 30.1 percent to P5.93 per kWh from P4.56 per kWh.

Supply improved by 5.2 percent to 2,510 MW from 2,387 MW, while demand increased by 2.5 percent to 2,003 MW from 1,955 MW.

The region saw its supply margin widen to 507 MW in October from the preceding month’s 432 MW.

As for Mindanao, the average spot market price soared by 49.3 percent to P5.20 per kWh from P3.48 per kWh.

Supply in the region declined by 6.2 percent to 3,408 MW from 3,635 MW, while demand accelerated by 2.8 percent to 2,054 MW from 1,999 MW.

As a result, the supply margin plunged to 994 MW from 1,636 MW.

With colder months approaching, IEMOP expects WESM rates to ease on the back of stable supply and improved demand.