IEMOP: Power spot prices rise despite tepid demand

BY LENIE LECTURA – AUGUST 10, 2022
from Business Mirror

The average wholesale electricity spot market (WESM) prices last month rose by 4.82 percent to P8.92 per kilowatt hour (kWh) despite lower demand, the Independent Electricity Market Operator of the Philippines (IEMOP) said on Wednesday.

Demand in Luzon and Visayas for July stood at 10,785 megawatts (MW), 540 MW lower than the June level as intermittent rains and thunderstorms over the past weeks resulted in cooler weather conditions.

Despite this, supply declined to 14,701MW in July from 15,214MW in June. The 513-MW decrease was due to the reported forced and planned outages of some large conventional generators. These resulted in a 27-MW increase in the supply margin making the supply-demand situation similar to June.

As a result, the average WESM prices stood at P8.92 per kilowatt hour (kWh), higher by 4.82 percent 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 percent of the time for the said period indicating that clearing prices at more than P9/kWh somewhat eased.

IEMOP also recorded a 7,226-gigawatt hour (GWh) energy consumption in July, when customers bought 599 GWh or 8.3 percent in the spot market at an effective rate of P8.91 per kWh. This is lower by P0.10/kWh compared to last month.

For August, IEMOP noted 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 P6.84/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.

IEMOP added that there was normal operation of the 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.