‘Power spot market prices up in June on low supply’

The Independent Electricity Market Operator of the Philippines (IEMOP) said on Wednesday prices at the Wholesale Electricity Spot Market (WESM) for June rose due to the higher power demand and lower supply.

In a statement, the IEMOP said Effective Spot Settlement Price (ESSP) went up by P2.59 per kilowatt-hour (kWh) last month, bringing the average price to P9.01/kWh, higher than May’s P6.42/kWh billing.

“The price increase was largely attributed to a lower supply margin – down by 258 MW or 6.22 percent, due to reported planned and forced generator outages in the said period,” IEMOP said.

The upward adjustment of market price was also “largely dependent” on the offer price of generators, which have also been affected by the rising fuel costs.

Due to this, the Secondary Price Cap Mechanism (SPC), which was set in place to protect consumers against sustained high WESM prices, was also applied 35.17 percent of the time in the June billing month.

“With the increase in market price, spot market purchases decreased. The customer spot quantity in June is only at 9.1 percent or equivalent to 714 GWh of the total requirement for electricity in the Luzon and Visayas grids,” IEMOP said.

Roughly 90 percent of the electricity consumption of end-users is sourced by the Distribution Utilities through power supply agreements with generation companies at their approved contract prices.

Recorded peak demand for Luzon and Visayas dipped by 2.43 percent compared to the month prior as the rainy season reduces the use of cooling systems.

Annualized, demand, however, was still 2.02 percent higher since the easing of pandemic restrictions.

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