Surge in demand props up electricity spot-market rate

By Lenie Lectura – July 6, 2020
from Business Mirror

Electricity spot-market price for June went up to P3.25 per kilowatt-hour (kWh), from P2.19 per kWh in the previous month, data released by the Independent Electricity Market Operator of the Philippines Inc. (IEMOP) showed.

IEMOP Chief Operating Officer Robinson Descanzo attributed the price increase to a spike in demand and power plant outage incidents that prompted distribution utilities (DUs) such as the Manila Electric Co. (Meralco) to source more from the spot market.

“The main driver is increase in demand. In June, particularly second week, there was a price spike because of high peak demand as well as the forced outage of a number of power plants,” said Descanzo during a virtual press conference.

Based on IEMOP’s latest assessment, June’s average supply and demand stood at 13,794 megawatts (MW) and 10,174MW, respectively.  Peak demand, meanwhile, stood at 12,611MW.

The effective spot settlement price (ESSP) for customers in June stood at P3.25 per kWh compared with P2.19 per kWh in May.

IEMOP is the operator of the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

Among the top priorities of IEMOP is the transition to the 5-minute market from an hour.

IEMOP officially launched its ‘Fast-Forward to Five’ campaign which aims to highlight the Parallel Operations Program (POP) Activities for the New Market Management System (NMMS) that will facilitate the 5-minute market trading by December.

In relation to the said campaign, IEMOP conducted back-to-back focus group discussions with WESM stakeholders last June 24 as a precursor to the succeeding phases of the POP.

It is also focused on participating with the Ancillary Services Technical Working Group in preparation for the reserve market.

IEMOP has proposed changes in rules to enhance the retail market trading in anticipation of the transition towards full retail competition. It is collaborating with the Philippine Electricity Market Corp. for the conduct of a detailed study on developing the electricity derivatives market to enhance the risk management mechanism of trading participants in the WESM and the implementation of the Green Energy Option Program and the Renewable Energy Market.

It noted that involvement of the Mindanao power players remains to be a determining factor in setting the timeline and target date for the operation of WESM in Mindanao.