WESM November average price declines to lowest level in five years
THE average price paid by customers in the wholesale electricity spot market ( WESM) in November dropped to P2.27 per kilowatt-hour, a rate which the Philippine Electricity Spot Market (PEMC) said is the lowest in the past five years.
In a briefing on Monday, PEMC President Melinda L. Ocampo said the decrease in the effective settlement spot prices (ESSPs) was due to the higher energy volume offers in the market as well as the colder temperatures during the month.
She said the “must” and “priority” dispatch of power coming from renewable energy sources had a big impact in bringing prices down.
“Aside from the fact that there were directives from the Department of Energy (DoE) to improve the technicals,” she said, referring to the audit required for power generation companies and distribution utilities.
“Meaning, they are aware that the DoE is also looking into standards,” she said, adding that the guidance from the DoE resulted in a rise in available capacity.
“Such a sharp decline in the market prices is welcome as long as wholesale customers like distribution utilities pass on the historically low market prices to their end-users,” she said in a statement distributed during the briefing.
WESM, which was created by Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, is the centralized venue for buyers and sellers to trade electricity as a commodity where its prices are based on actual use, or the demand, and availability, or the supply. PEMC is the governance arm of the spot market.
During the November billing month, wholesale customers sourced 19% of their power supply requirements in the spot market. The share is the highest since March 2009, PEMC said.
Coal accounted for 47.42% of the generated resources. Renewable resources, which include large hydropower and geothermal technologies, made up 26.25%. The comparative share of coal in 2015 was 44.85%, while renewables had 24.33%.
“The recent developments in the electricity market underpin PEMC’s efforts in establishing a competitive, eff icient, transparent and reliable market forces,” Ms. Ocampo said.
“The coming year will also see PEMC’s involvement in the full implementation of retail competition and the establishment of WESM in Mindanao,” she added.
Ms. Ocampo said the DoE had set June 2017 as the target date for the spot market in Mindanao to start. But while waiting for the directive for the policy maker, PEMC has scheduled to meet with the system operator in the southern island on Dec. 22 “because we really need to act faster,” she added.
“We really need to comply with the target date,” she said. —