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  • Wed, 21 February 2024

News

14 September 2023
SPOT MARKET PRICES DECLINE IN SEPTEMBER 2023

The Wholesale Electricity Spot Market (WESM) has experienced a notable decline in prices during the first two weeks of the September billing period, as reported by the Independent Electricity Market Operator of the Philippines (IEMOP) during its latest media briefing. This decline is primarily attributed to ample supply margins and tamer demand compared to the summer months.

In Luzon, average demand dropped from 9,480 MW to 9,119 MW, resulting in a decrease in spot market prices from 5.53 PhP/kWh in August to 4.12 PhP/MWh in September. Similarly, Visayas witnessed a decrease in average demand from 1,872 MW to 1,850 MW during the comparative billing periods. Consequently, the average WESM price saw a reduction of 0.25 PhP/kWh, declining from 6.18 to 5.93 PhP/kWh. Meanwhile, in Mindanao, a decrease in the average supply margin of 358 MW, attributed to the deration and outage of some generators, led to a price increase from 4.82 PhP/kWh in August to 5.81 PhP/kWh in September.

IEMOP attributes the lower demand to the ongoing rainy season, resulting in supply sufficiency across all three major grids in the Philippines. Luzon and Visayas exhibited supply margins of 3,845 MW and 273 MW, respectively, while Mindanao maintained a supply margin of 842 MW. Coal remained the predominant energy source in Luzon, serving approximately 57.5% of demand, followed by natural gas at 22.8%. Notably, the contribution from Renewable Energy (RE) plants increased to 17.2%, up from 12.9% in July, primarily due to heightened output from Hydro and Wind power plants. In Visayas, RE resources contributed 43.9%, while Coal and Oil-based plants accounted for 56.1% of the energy mix. In Mindanao, Coal retained its dominance with 60.2%, followed by contributions from Large Hydro plants at 33.7%.

Out of the total metered consumption of 9,124 GWh in August, 20.4% of the energy was purchased by customers in the spot market at an effective rate of 5.87 PhP/kWh. The spot market volume increased by 2.6% from the previous July 2023 spot market volume of 17.8%.

During the media briefing, IEMOP provided an update on the status of the Reserve Market. At present the Reserve Market Trial Operations Program is ongoing. Once the Department of Energy declares the start of commercial operations, IEMOP shall execute the final preparations in coordination with the System Operator and Ancillary Services Providers for the eventual launch of the Reserve Market Commercial Operations this year.