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  • Thu, 13 June 2024

News

22 May 2024
SUSTAINED HIGH DEMAND AFFECTS MARKET PRICES IN APRIL TILL MID-MAY 2024

During its media briefing, the Independent Electricity Market Operator of the Philippines (IEMOP) discussed the highlights of Wholesale Electricity Spot Market (WESM) operations from the April 2024 billing month up until the preliminary market outcomes as of 19 May 2024.

The Luzon region recorded an average demand increase from 9,385 MW in March to 10,310 MW in April 2024. Meanwhile, for Visayas and Mindanao, the average demand increased from 1,867 and 1,955 MW to 2,002 and 2,063 MW, respectively. The increase in demand, primarily driven by the summer heat waves, led to the recorded year-to-date peak levels in all grids. Luzon demand recorded a new peak at 14,011 MW on 24 April 2024, at 1455H, Visayas demand peaked at 2,581 MW on 24 April 2024, at 1430H, and Mindanao also recorded a new peak demand of 2,642 MW on 25 April 2024, at 1400H.

Meanwhile, supply levels for Luzon and Visayas were affected by both planned and forced outages. The first half of April saw ample supply levels across all grids. However, towards the second half of April, forced outages of generating plants resulted to yellow alert and red alert conditions, indicating potential reserve supply insufficiency in the grid. It was recorded that 19.68% of the trading intervals for April were imposed with Secondary Price Cap compared to 7.04% in March. Consequently, the final average spot prices notably increased. In Luzon, prices increased from 5.34 PhP/kWh in March to 6.63 PhP/kWh in April. Similarly, Visayas experienced an increase from 6.38 PhP/kWh to 8.73 PhP/kWh, while Mindanao saw prices increase from 4.21 PhP/kWh to 6.43 PhP/kWh. System-wide, the average price in the WESM for April 2024 was 6.90 PhP/kWh compared to 5.19 PhP/kWh in March 2024.

Higher-priced power plants were cleared and scheduled to meet the system demand, particularly oil-based power plants, which generated 1.9% of the energy mix in April versus 0.8% in March 2024. The dispatch of these more expensive power plants contributed to the higher electricity prices during the month.

Based on the preliminary market data as of 19 May 2024, despite the tamer heat wave condition as sporadic rain falls across the country, yellow alerts continued to be experienced in the Luzon and Visayas grids while normal grid conditions prevailed in Mindanao. The regional spot prices obtained are 7.88 PhP/kWh, 8.43 PhP/kWh, and 6.98 PhP/kWh, respectively, for Luzon, Visayas, and Mindanao. Between the market price in April and May (preliminary), a potential increase of 18.85% can be observed in Luzon, a 3.44% decrease in Visayas, and an 8.55% increase in Mindanao. While the system average price as of 19 May 2024 is estimated at 7.85 PhP/kWh, prices obtained for the May billing period are indicative and subject to pricing validation, which will be done towards the end of the current WESM billing month.

IEMOP emphasized the importance of continuing investments in the generation sector to cope with the country’s increasing electricity demand. IEMOP remains committed to providing efficient and reliable electricity market operations to all WESM stakeholders and will continue to closely monitor the supply, demand, and prices in the coming months.