Increased power supply drives down WESM prices in February

By Gabriell Christel Galang – Mar 5, 2025 10:10 AM
from Manila Bulletin

The Independent Electricity Market Operator of the Philippines (IEMOP) reported a decline in Wholesale Electricity Spot Market (WESM) prices in February due to increased supply in the system.

Data from IEMOP showed that the average system price declined by 7.8 percent to ₱2.73 per kilowatt-hour (kWh), compared to January’s price of ₱2.96/kWh.

Last month’s price cut was driven by an increase in both supply and demand, with supply rising to 20,512 megawatts (MW) from 20,110 MW and demand increasing to 12,904 MW from 12,529 MW.

Across the three regions, Mindanao was the only one with a slight supply decrease, dropping by 3.6 percent to 3,640 MW, while its demand inched up by 1.3 percent to 1,956 MW.

The power rate in the area, however, grew by 2.6 percent to ₱2.72/kWh.

Luzon’s demand grew by 3.8 percent to 9,071 MW, while supply increased by 3.7 percent to 14,475 MW, leading to a drop in the power price from ₱2.98/kWh to ₱2.71/kWh.

In contrast, the Visayas registered a marginal supply increase to 2,397 MW, with demand at 1,876 MW, resulting in the largest price drop among the regions in February, from ₱3.13/kWh to ₱2.81/kWh.

According to IEMOP, coal remains the largest contributor in the generation mix at 55.8 percent, while natural gas is at 17 percent.

Some renewable energy (RE) sources in the generation mix slightly dropped last month, such as geothermal at an 8.7-percent share, hydro generation at 9.6 percent, and wind power at 1.8 percent. Pumped storage also declined, while battery storage had a small share of 0.2 percent.

Meanwhile, the share of solar energy in the generation grew to 4.1 percent in February.

“The effective spot settlement price (ESSP) fell to ₱2.81/kWh, the lowest in the observed period. Total trading value declined to ₱8.78 billion, indicating lower market activity and subdued prices,” IEMOP explained.

Previously, IEMOP projected a potential increase in power prices during this year’s summer season due to a rise in power demand. However, they believe that demand will not reach the peak levels observed last year.

The Independent Electricity Market Operator of the Philippines (IEMOP) reported a decline in Wholesale Electricity Spot Market (WESM) prices in February due to increased supply in the system.

Data from IEMOP showed that the average system price declined by 7.8 percent to ₱2.73 per kilowatt-hour (kWh), compared to January’s price of ₱2.96/kWh.

Last month’s price cut was driven by an increase in both supply and demand, with supply rising to 20,512 megawatts (MW) from 20,110 MW and demand increasing to 12,904 MW from 12,529 MW.

Across the three regions, Mindanao was the only one with a slight supply decrease, dropping by 3.6 percent to 3,640 MW, while its demand inched up by 1.3 percent to 1,956 MW.

The power rate in the area, however, grew by 2.6 percent to ₱2.72/kWh.

Luzon’s demand grew by 3.8 percent to 9,071 MW, while supply increased by 3.7 percent to 14,475 MW, leading to a drop in the power price from ₱2.98/kWh to ₱2.71/kWh.

In contrast, the Visayas registered a marginal supply increase to 2,397 MW, with demand at 1,876 MW, resulting in the largest price drop among the regions in February, from ₱3.13/kWh to ₱2.81/kWh.

According to IEMOP, coal remains the largest contributor in the generation mix at 55.8 percent, while natural gas is at 17 percent.

Some renewable energy (RE) sources in the generation mix slightly dropped last month, such as geothermal at an 8.7-percent share, hydro generation at 9.6 percent, and wind power at 1.8 percent. Pumped storage also declined, while battery storage had a small share of 0.2 percent.

Meanwhile, the share of solar energy in the generation grew to 4.1 percent in February.

“The effective spot settlement price (ESSP) fell to ₱2.81/kWh, the lowest in the observed period. Total trading value declined to ₱8.78 billion, indicating lower market activity and subdued prices,” IEMOP explained.

Previously, IEMOP projected a potential increase in power prices during this year’s summer season due to a rise in power demand. However, they believe that demand will not reach the peak levels observed last year.