Year: 2022

Aside from the relatively colder weather in November, the pre-holiday season in the Philippines observed a decline in WESM spot prices which registered an average of 8.53 PhP/kWh or around 7.48% lower than the previous month’s 9.22 PhP/kWh record. The interaction of demand and supply took a foothold on this occurrence as the system demand levels diminished by 4.21% and amounted to around 10,355 MW. Regional demand levels followed suit as the figures for the Luzon and Visayas average demand reduced to 8,659 MW from 9,075 MW and 1,696 MW from 1,734 MW, respectively.

At the same time, the supply level met a slight increase by 1.58% or averaging 13,691 MW – with coal remaining to be the major player in the generation mix. With these, the margin greatly improved by 25.04% compared to the month of October and resulted in lesser instances of Secondary Price Cap impositions.

Meanwhile, as the festivities usher in, the Independent Electricity Market Operator of the Philippines (IEMOP) observed an increment in the December spot prices which amounted to approximately 9.12 PhP/kWh. As of 11 December, this was noted to be brought about by the increase in demand and decrease in the level of supply.

As for the spot market transactions, a downward movement was seen as it diminished from 13.3% or 967 GWh to 11.7% or 841 GWh last November. Likewise, the Effective Spot Settlement Price lowered from 9.21 PhP/kWh to 8.62 PhP/kWh in the said period.

Overall, the electricity demand for 2022 saw a normalcy in terms of its growth as compared to its previous levels in 2020 and 2021 where the effect/s of the pandemic are extremely felt. On average, it has grown by 3.6% versus the 2019 levels. In terms of peak demand values, the demand has grown by 8% from the recorded peak demand in 2019. The WESM prices for 2022 also recorded a significant increase brought about by the soaring prices of imported fuel in the global market.

During its monthly media briefing, IEMOP also discussed its remaining efforts for the year. This includes active and dynamic coordination with its participants on matters related to the pilot testing of the retail aggregation and RE Market, to name a few. Throughout the holiday season, IEMOP emphasized that it will continue its pursuit of excellence as it contributes to a warm, bright, and cheerful holiday for every Filipino household.

Spot prices in the WESM encountered a slight increase at the onset of this year’s final quarter by capping off at 9.22 PhP/kWh. This figure is only a notch higher or around 1.10% above
last month’s record of 9.12 PhP/kWh. Outages by major coal, geothermal, oil-based, and natural gas plants remain to be one of the factors behind this movement, and generators with
higher offer prices were dispatched to make up for the needed energy requirements. The average supply for October was recorded at 13,478 MW or 0.89% lower than the figure for September.
On the other hand, October demand increased on average by 171 MW (1.61% higher) compared to September settling at 10,810 MW.

Regional peak demand of Visayas rose from 2,225 MW to 2,261 MW on a month-on-month comparison. However, the Luzon peak demand somewhat decreased from 11,459 MW to
11,253 this October.

Given those circumstances, the average margin for October dropped by 9.86% and led to the imposition of the Secondary Price Cap (SPC) mechanism, a mitigating measure to safeguard
consumers against sustained high WESM prices. The SPC was able to cushion the prices for 52% and 53% of the time for Luzon and Visayas, respectively.

Meanwhile, the preliminary values of November show an upward trend in the supply levels, averaging 13,651 MW. As of 13 November, the power bourse is also witnessing a lower
the demand of approximately 10,083 MW; thereby, leading to a greater margin and lower price average price of 8.08 PhP/kWh.

Moving on, the spot market transactions for October accounted for 13.3% or 969 GWh. This is higher than the recorded amount of spot market transactions last September which only
amounted to 12.1% or 889 GWh. The Effective Spot Settlement Price (ESSP) also showed an increase in value, from 9.16 PhP/kWh to 9.21 PhP/kWh in the said month.

In its monthly media briefing, the Independent Electricity Market Operator of the Philippines (IEMOP) also reiterated its advocacy for the Efficient Use of Energy Towards Productivity.
IEMOP noted several ways to enable efficient use of energy and presented a study wherein as a result of efficient use of energy, a 3% reduction in energy demand could be achieved
which can result to lower WESM prices and mitigation of yellow and red alerts in the grid.

The independent market operator is also currently in coordination with the DOE and ERC for the highly anticipated Reserve market and WESM Mindanao which is geared to bring more opportunities and advancement for the entire industry. 

In its monthly media briefing, the Independent Electricity Market Operator of the Philippines (IEMOP) noted that for the September Wholesale Electricity Spot Market (WESM) results, average demand rose by 1.47% or 154 MW to 10,639 MW, while average supply was reduced by 4.73% or 675 MW to 13,599 MW due to generator outages. The average electricity market price was recorded at 9.12 PHP/kWh as compared to the previous month’s 7.26 PHP/kWh. After accounting for all bilateral and spot market transactions, the effective settlement price for September was recorded at 9.16 PHP/kWh which was the highest for the year.

For September, total generation from diesel plants accounted for 220 GWh (2.9% of the generation mix) compared to 93 GWh (1.2% of the generation mix) production last August. For Coal power plants, the contribution for September is 4,434 GWh (57.6%), Natural Gas at 1,407 GWh (18.3%), Geothermal at 772 GWh (10%), Hydro plants at 582 GWh (7.6%), Variable Renewable Energy Resources (Solar and Wind) at 172 GWh (2.8%) Biomass plants at 67 GWh (0.9%), and Battery Energy Storage Systems at 2 GWh (0.03%).

During the briefing, IEMOP also launched its advocacy for the “Efficient Use of Energy Towards Productivity”. This advocacy is in line with the Market Operator’s thrust to raise awareness towards the efficient use of electricity to help lower the demand not only during peak hours but also during off-peak hours without sacrificing productivity which stimulates economic growth. Lowering demand will redound in a reduction in the utilization of expensive fossil fuels in the grid. This can also result in a reduction in market clearing prices in the WESM which would be advantageous to consumers. IEMOP’s advocacy echoes the Department of Energy’s (DOE) call on Energy Efficiency and Conservation which aims to “institutionalize energy efficiency and conservation as a national way of life geared towards the efficient and judicious utilization of energy by formulating, developing, and implementing energy efficiency and conservation plans and programs.”

IEMOP noted that unplugging electronic appliances and equipment when not in use or on standby mode may result in a considerable decrease in demand especially if multiplied by the million. Setting ACU temperatures from extremely low to comfortable degrees may also contribute to a significant reduction in demand. Using energy-efficient lighting or turning off the lights during noon breaks can also contribute to the reduction of daytime peak demand.

In addition, IEMOP is undertaking studies to broaden this advocacy and support efforts for demand-side management that will ensure efficient use of energy towards productivity. IEMOP emphasized that starting this advocacy now can be very helpful in ensuring a secure and reliable electricity supply, particularly in the coming summer months when electricity demand is at its height.

For four (4) years now, IEMOP has maintained its high level of commitment to delivering excellent and world-class market operations services to all WESM and RCOA stakeholders. To commemorate this milestone, it published a special report on the power industry situation which showcases data-driven analysis and provides recommendations with the end goal of ensuring the security, reliability, and affordability of electricity in the Philippines.

You may download a copy of the report here:  IEMOP Special Report: Philippine Electric Power Industry Assessment

The Independent Electricity Market Operator of the Philippines (IEMOP) and the Philippine Electricity Market Corporation (PEMC) commend the recent appointments of two key figures in the electric power industry, namely: Raphael Lotilla as Secretary of Energy, and Monalisa Dimalanta as Chairperson of the Energy Regulatory Commission.

The appointments of Secretary Lotilla and Chairperson Dimalanta come at a critical juncture where the electric power industry is in the midst of unprecedented challenges brought upon by the unceasing increase of fossil fuel prices compounded with high inflation rates that have tremendously burdened the lives of our fellow Filipinos. Surmounting these unprecedented challenges would require excellent and experienced leadership at the helm of the Department of Energy and the Energy Regulatory Commission, which Secretary Lotilla and Chairperson Dimalanta certainly bring forth to the electric power industry.

“We are pleased to see the appointment of Secretary Lotilla and firmly believe in his capacity and integrity as the new energy chief. His years of experience in the industry will be invaluable in addressing the country’s challenges and goals of attaining energy security, independence, and sustainability”, IEMOP Chairman Ralph Villanueva and PEMC Chairman Noel Aboboto said in a joint statement, declaring also that they are “confident that the new ERC Chairperson, Atty. Dimalanta, will be able to provide the leadership and regulatory direction which are vital in these challenging times for the energy sector.”

With the said appointments, both IEMOP and PEMC reiterate their commitment and support to the Department of Energy and the Energy Regulatory Commission in ensuring the quality, reliability, security and affordability of electricity in the country.

The Independent Electricity Market Operator of the Philippines in its monthly briefing encourages the efficient use of electricity amidst the high price of imported fossil fuels and given the observed growth in demand due to the reopening of schools and universities in the country beginning last week of August.

Recent data in the Wholesale Electricity Spot Market (WESM) showed a drop in electricity prices – down by PhP 1.66/kWh to PhP 7.27/kWh, for the August billing period due to an increased supply margin equivalent to 844 MW. The lower market price also resulted in an uptick in customer purchases in the spot market averaging about 14% of their energy consumption as compared to the 8.3% purchases in the preceding month.

However, for the first 10 days of September, it was noted that the peak demand has continuously risen from July. So far, our peak demand in Luzon increased by 187 MW to 11459 MW, while in the Visayas, the demand peaked at 2225 MW, higher by 34 MW. The recent planned and forced generator outages have also resulted in an increase in spot market prices and very recently, an issuance of red and yellow alerts in the Luzon grid. As such, IEMOP reiterates the importance to save up and efficiently manage our electricity consumption which will not only save on our electricity cost but also, immediately help in mitigating reduced supply margins.

Following the strong earthquake that rocked the northern Philippines last July 27, the Independent Electricity Market Operator of the Philippines (IEMOP) maintained normal operations of the Wholesale Electricity Spot Market (WESM) in Luzon despite the sudden dip in demand caused by the tripping of some loads in the areas affected by the Magnitude 7.0 quake. IEMOP also activated its Business Continuity Procedures to ensure continued market operations in Luzon and Visayas grids triggered during emergency situations such as force majeure events.

The July billing month posted a 540 MW decrease in average demand due to cooler weather conditions brought by intermittent rains and thunderstorms over the past weeks. However, there was also a notable 513 MW decrease in average supply due to reported forced and planned outages of some large conventional generators. These resulted in a slight 27 MW increase in the supply margin making the supply-demand situation similar to June. As a result, the average load price was computed at 8.92 PhP/kWh, higher by 4.82% as compared to the previous month. However, the imposition of the Secondary Price Cap (SPC) mechanism, a mitigating measure to protect consumers against sustained high WESM prices, was also reduced to around 28% of the time for the said period indicating that clearing prices at more than P9/kWh somewhat eased.

IEMOP also recorded a 7,226 GWh energy consumption in July, where customers bought 599 GWh or 8.3% in the spot market at an effective rate of 8.91 PhP/kWh. This is lower by 0.10 PhP/kWh compared to last month.

There is a significant decline in market prices for the first few days of the August billing month (covering the last week of July and the first few days of August). The average price is 6.84 PhP/kWh. This may be attributable to a higher supply margin in the power bourse averaging at 4,868 MW, much higher compared to the past two months, as well as lower market clearing prices possibly due to the easing coal prices in the global market.

In its monthly media briefing, IEMOP also provided market milestones and development updates. Several meetings have been conducted between ERC and MERALCO to plan and discuss the proposed guidelines for implementing the Retail Aggregation pilot testing with UP Diliman Campus. In addition, IEMOP also mentioned that since the Green Energy Option Program (GEOP) implementation, 95 end-users have already switched to 100% RE for their electricity supply and are expected to increase in the coming months. For the Reserve Market, IEMOP has been continuously coordinating with the DOE, ERC, and PEMC for the approval of the amendment to the PDM to include the pricing and cost-recovery mechanism for reserve capacities. Lastly, IEMOP is continuously working with all the Mindanao stakeholders to assist them in completing their registration to the WESM for the eventual full commercial operations of WESM in the region, as will be declared by the energy department.

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IEMOP is a non-stock, non-profit corporation governed by a professional board of directors composed of individuals
not affiliated with any of the electric companies that trade in the WESM. The IEMOP carries out the mandate to pursue
the WESM objective to have a transparent, fair, competitive, and reliable market for the trading of electricity
throughout the Philippines.

As a market operator, IEMOP is bound to strictly comply with the EPIRA, its Implementing Rules, and Regulations, the WESM
Rules, and other related issuances of the Department of Energy (DOE).

We Run Markets.

The Independent Electricity Market Operator of the Philippines (IEMOP) observed an increase in the spot market prices for the June 2022 billing period. The Effective Spot Settlement Price
(ESSP) in the Wholesale Electricity Spot Market (WESM) edged higher by Php 2.59 / kWh in June, bringing the average price to Php 9.01 / kWh compared to the previous billing month’s Php 6.42 / kWh. The price increase was primarily attributed to a lower supply margin – down by 258 MW or 6.22%, due to reported planned and forced generator outages in the said period. While a variety of factors drive changes in electricity market prices, mainly the supply-demand interaction, it is also largely dependent on the offer price of the generators, which considers fuel prices – to which we have observed a surge in prices (oil, coal, liquefied natural gas) in the previous weeks. As a result, the Secondary Price Cap Mechanism (SPC), which was set in place to protect consumers against sustained high WESM prices, was also applied 35.17% 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% or equivalent to 714 GWh of the total requirement for electricity in the Luzon and Visayas grids. Around 90% of the electricity consumption of end users is still sourced by the Distribution Utilities through Power Supply Agreements (PSAs) with Generation Companies at their approved contract prices. The volume of energy purchased in the WESM (in %) for June is also the lowest for the second quarter.

Meanwhile, the recorded peak demand for Luzon and Visayas dipped by 350 MW or 2.43% compared to the previous month due to the onset of the rainy season which dampened the use of cooling systems. On a year-on-year comparison, the demand was higher by 278 MW (2.02%) since the implementation of looser government restrictions due to the improving COVID-19 pandemic situation. From a regional level perspective, the peak demands for both Luzon and Visayas are also lower compared to the May billing period. Luzon’s peak demand is lower by 265 MW, while Visayas is lower by 63 MW.

During the briefing, IEMOP, as part of its function as the Central Registration Body for implementing the Retail Competition and Open Access (RCOA), also provided updates on the recent development on Retail Aggregation promulgated by the ERC. This scheme will allow end-users to aggregate their demand and participate as a Contestable Customer in RCOA and enjoy the benefit of choosing their electricity supply, offering competitive rates and value-adding services. IEMOP, for its part, is currently reviewing its processes and the needed system enhancements to accommodate and facilitate retail aggregation, which is set to take effect this year.

As part of its thrust to provide excellent and reliable market management for the WESM and to facilitate competition and customer choice through RCOA, IEMOP will continue to uphold its commitment to serving the industry through collaborative efforts with the stakeholders, the DOE, and the ERC.

The Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) is deeply concerned about recycled criticisms against it—including those questioning the legality of its status as Independent Market Operator (IMO) for the Wholesale Electricity Spot Market (WESM).

IEMOP emphasizes that its operation of the WESM is sanctioned by law. Republic Act R.A. No. 9136, or the Electric Power Industry Reform Act (EPIRA), mandates that the WESM should be operated by an entity independent of the government and industry players.

Consequently, and pursuant to this law, the Department of Energy (DOE) promulgated DOE Circular No. DC2018-01-0002, titled “Adopting Policies for the Effective and Efficient Transition to the Independent Market Operator for the Wholesale Electricity Spot Market.” The circular effected the transition of the WESM operations from the Philippine Electricity Market Corporation (PEMC) to IEMOP, or from the Autonomous Group Market Operator (AGMO) to the IMO. This transition was endorsed by the electric power industry participants, while the Energy Regulatory Commission (ERC) and the Joint Congressional Energy Commission (JCEC) were notified and were present at the WESM operations turnover ceremony.

Contrary to accusations that it had either contributed to or occasioned higher power costs, IEMOP had significantly lowered the cost of market operations since it took over the WESM in 2018 (it saved Php 58.295 million in 2019 and Php 68.199 million in 2020), reduced the total market transaction fees in the WESM, and has consistently operated the WESM up to industry standards.
IEMOP took over WESM operations pursuant to law and DOE policy (which has the force of law) and will continue to fulfill its mandate—again, pursuant to law and DOE policy.

IEMOP will abide by whatever policy the DOE establishes—even one that amends or altogether supersedes the very policy effecting the transition of WESM operations to IEMOP.

The malicious attacks against IEMOP (including its directors and officers), therefore, are not only actionable, legally, but also groundless, operationally.

Atty. Richard J. Nethercott, President & CEO of IEMOP, clarified that “IEMOP has no vested interest in WESM operations. We have a mandate. And we are faithfully performing that mandate. Interestingly, the policy that led to the transition of WESM operations to IEMOP was never questioned before our courts. DOE Circular No. DC2018-01-0002, unless revoked or superseded by subsequent legislation, is valid and binding on all energy participants. Even the ERC, which has since refused to acknowledge IEMOP, has never questioned the circular.”

“We are not unmindful, however, of unfounded criticisms that have effectively demoralized our personnel. Thus, I take this occasion to call on the DOE to revisit DOE Circular No. DC2018-01-0002 and reassess the viability of maintaining the two-entity set-up of the WESM operations and governance,” Atty. Nethercott added.

IEMOP reiterates that the transition process was undertaken transparently and pursuant to law and DOE policy, with all government authorities and stakeholders notified of the steps leading to IEMOP’s assumption of WESM operations.
Hence, while respecting the right to free expression, IEMOP nonetheless requests its critics to exercise prudence in expressing their views—especially those that are unfounded or, worse, libelous.

IEMOP assures the general public that it will abide by all policies promulgated by the DOE—as it has previously done so consistently.

This month recorded another increase in the supply levels which resulted to a more competitive price in the Wholesale Electricity Spot Market (WESM). With the supply amounting to 15,406 MW, or a 1,411 MW difference from that of the previous month’s, the 10.08% increase led to a greater margin in the power bourse despite the growth in demand of around 7.70% or around 805 MW for a total of 11,259 MW.

One of the main factors attributable to the growth in supply was the resumption of the operations of notable generators who were previously on outage during the latter half of April. Most of which were coal and geothermal plants. Likewise, the Department of Energy, through its Energy Task Force Election, stayed on top of the entire demand-supply situation which further paved the way for the ample supply levels during the election period.

Meanwhile, coming from April, the demand levels continued to escalate at a gradual pace as the economy started to pick-up and businesses continued to resume their operations given the more lenient restrictions on health protocols. More so, for the onset of May, the nation has still encountered remnants of the dry season which forced people to consume more electricity with the increased use of air-conditioning systems.

The same goes for the Luzon-Visayas and regional peak demands which happened to record their respective highest figures for the year. For the Luzon-Visayas peak demand, we have recorded around 14,380 MW – a 5.27% increase from the same period of the previous year. In fact, this figure also managed to surpass the peak demands of the previous years. Meanwhile for the Luzon grid, it was recorded at 12,103 MW or around 4.42% increase from the same period last 2021.The Visayas grid reached its peak demand at 2,285 MW and recorded a 4.96% increase basing from the May 2021 values.

In spite of this increasing levels in demand, the significant growth in supply was able to offset the scale through the increase in margin from 3,541 MW to 4,147 MW which provided enough leeway for the decrease in the average spot price of 6.21 PhP/kWh. This is lower by 0.80% or 0.05 PhP/kWh than the April 2022 figure.

On the other hand, for the month of April, the spot market transactions accounted for 10.1% percent or 731 GWh. This is lower than the recorded amount of spot market transactions last March which amounted to 12.8% or 844 GWh. The Effective Spot Settlement Price (ESSP) also showed a decrease in value, from 7.34 PhP/kWh last March down to 6.44 PhP/kWh in April 2022.

As part of its thrust to provide reliable market management, IEMOP will continue to apprise its participants and stakeholders on matters that are geared towards the development of the industry and nation-building.

An increase in supply levels was noted to be one of the major factors to the lowering of WESM spot prices for the month of April. The Independent Electricity Market Operator of the Philippines (IEMOP) observed better supply conditions due to the resumption of operations by generators who were previously on outage. With a positive increment of 449 MW or around 3.3% from last month’s figure, the steady stream of supply of 13,995 MW led to a drop in WESM prices from 6.97 PhP/kWh to 6.26 PhP/kWh.

Another contributor to the decrease in prices was the decline in demand – by around 146 MW or 1.38%. This was partly brought about by the presence of two typhoons, Agaton and Basyang, which gave off heavy rains and a relatively colder weather all over Luzon and Visayas. Likewise, the period covered a week-long religious break which temporarily halted the operations of many businesses. As such, the resulting demand level of 10,454 MW became an attributor to the increase in operating margin by 20.18%.

The same pattern was also evident in the current month’s system peak demand of 13,609 MW which happened to be lower than that of March. For the regional figures, the peak demand of the Luzon decreased from 11,617 MW to 11,492 MW; while that of the Visayas grid increased from 2,143 MW to 2,156 MW.

The Market Operator also presented the settlement results for the March billing period. During the month of March, the spot market transactions accounted for 12.8% percent of all metered quantities or 844 GWh. This is higher than the recorded amount of spot quantities last February. On the other hand, the Effective Settlement Spot Price (ESSP) for March settled at 7.34 PhP/kWh which was higher than that of February at 6.51 PhP/kWh.

As the elections come closer, IEMOP assures the general public of its steadfast commitment in providing excellent and reliable electricity market operations service that is fit for nation-building.