Electricity spot prices fall in Luzon, Visayas in early September

ELECTRICITY spot market prices fell in Luzon and the Visayas in early September as power demand declined, the Independent Electricity Market Operator of the Philippines (IEMOP) said, while prices in Mindanao increased.

'This decline is primarily attributed to ample supply margins and tamer demand compared to the summer months,' the IEMOP said in a statement.

In a virtual briefing, Isidro E. Cacho, Jr., IEMOP's head of corporate strategy and communications, said that the average spot market price in Luzon declined to P4.12 per kilowatt hour (kWh) in the first two weeks of September, from P5.53 per kWh in August.

In September so far, average supply increased 3.72% to 13,394 megawatts (MW), while demand fell 3.80% to 9,119 MW.

In the Visayas, the average electricity spot market price likewise fell to P5.93 per kWh in September from P6.18 per kWh previously.

Supply levels hit 2,329 MW, down 2.92%. Demand dropped 1.18% to 1,850 MW.'Meanwhile, in Mindanao, a decrease in the average supply margin of 358 MW, attributed to the deration and outage of some generators, led to a price increase from P4.82 per kWh in August to P5.81 per kWh in September,' it said.

The spot market serves as the venue where energy companies can buy power when their long-term contracted power supply is insufficient for their customers' needs.

'We foresee that, if those predicaments or situations of supply and demand continues… then we expect the prices to be sustained in the current level, if not lower. Hopefully, that's what will prevail,' Mr. Cacho said.

As of the first half, Mr. Cacho estimated more than 4,000 identified contestable customers from the Retail Competition and Open Access (RCOA) and the Green Energy Option Program.

'If we pegged it at 4,000, we are seeing that half of the expected contestable customers are already participating in the RCOA or competitive retail electricity market,' he said.

Meanwhile, Mr. Cacho said that the trial period for the reserve market is still ongoing and targeted for completion by the end of the month.

In June, the Department of Energy directed the IEMOP to commence trial operations for the reserve market, while awaiting for the approval of the price determination method from the Energy Regulatory Commission.

'Although the marching orders to us is to ready it anytime… until the end of the year, we will (undertake) final preparations. Hopefully, we get to launch it before the year ends,' he said referring to the commercial launch. - Sheldeen Joy Talavera