Spot prices ease in Feb. on improved supply margin

POWER PRICES in the Wholesale Electricity Spot Market (WESM) continued to decline in February as supply margins improved, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

In a statement on Sunday, IEMOP reported a 1.8% month-on-month decline in the average WESM rate system-wide to P3.50 per kilowatt-hour (kWh).

Available supply increased 4.4% to 19,992 megawatts (MW). Demand grew 3.1% to 12,874 MW.

“Because supply increased faster than demand, the system maintained a larger buffer of available generation capacity,” IEMOP said.

Electricity demand in Luzon grew 5.2% to 9,016 MW, while available generation rose 8% to 14,286 MW. This resulted to a higher supply margin, which helped reduce the region’s spot price to P2.69 per kWh, down 17.2% from a month earlier.

Supply margins in the Visayas and Mindanao slightly decreased due to “higher levels of generating unit outages and variations in electricity transfers between regions,” IEMOP said.

Spot prices in the Visayas increased 26.6% month on month to P5.37 per kWh.

During the period, available supply dropped 4.4% to 2,256 MW. Demand declined 1.7% to 1,829 MW.

The market operator said the Visayas grid was not able to receive more electricity from the Luzon grid through the Leyte-Luzon transmission interconnection, which is already operating close to its maximum capacity.

Similarly, the Mindanao-Visayas interconnection faced periods of constrained transfers, reducing the available supply of the Mindanao grid by 3.2% to 3,449 MW, with demand easing 1.4% to 2,028 MW.

As a result, the region’s electricity rates rose 23.2% month on month to P5.25 per kWh.

IEMOP said several power plants experienced both planned maintenance outages and unexpected shutdowns, prompting the more frequent dispatch of higher-cost generating units during periods of higher demand.

IEMOP said it “continues to closely monitor electricity supply and demand conditions in coordination with the system operator and market participants to support the reliable and efficient operation of the power system.”

IEMOP operates the WESM, where energy companies can purchase power when their long-term contracted power supply is insufficient for customer needs. — Sheldeen Joy Talavera