POWER PRICES at the wholesale electricity spot market (WESM) slipped to an average of P3.17 per kilowatt (kWh) in November, slightly lower than price levels a month and a year earlier, according to the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP).
The market operator said the spot prices in recent months were “relatively low for the past three years.”
In its report on Wednesday, prices so far this year were highest in March at P5.05 per kWh, and fell steadily in succeeding months to reach their low in August at P2.66 per kWh. Prices picked up in September to P2.91 per kWh and P3.58 per kWh in October.
“The recent low spot prices provide an indication that they will continue to be low for the rest of December 2018 since lower demand levels are still expected during this time of the year,” IEMOP said.
“Congestion is still frequently observed at the Cebu-Negros submarine cable given that the high output from renewable energy and conventional plants in the islands of Negros and Panay continue to be exported towards Cebu,” it added.
In its report, the market operator said the aggregate peak demand in the third quarter for Luzon and the Visayas reached 12,326 megawatts (MW), up 8% from a year earlier.
“This increase was largely driven by the increase in demand in the Luzon grid,” it said.
It also said power supply levels were “generally sufficient to support the demand requirements” for the third quarter.
But it said it had recorded periods “that reflected tight supply conditions.” The periods were between Oct. 9-12, Oct. 17, Oct. 25, and Nov. 5-7, 2018 “where forced outages and/or de-ratings further depleted the supply levels during these periods.”
“Coincidentally, price spikes were experienced at the same time most of these tight supply conditions manifested. Such conditions, however, were momentary, as they did not trigger the activation of the secondary price cap,” it said.
IEMOP is a non-stock, non-profit corporation governed by a board of directors composed of individuals not affiliated with any of the electric companies that trade in the WESM.
The company facilitates the registration and participation of generating companies, distribution utilities, directly connected customers or bulk users, suppliers and contestable customers in the WESM.
It also manages the metering, billing, settlement and collection of spot trading amounts for the benefit of the market participants. — Victor V. Saulon