WESM prices up in June

Wholesale electricity spot market (WESM) prices rose last month as demand picked up after nearly three months of lockdown coupled with forced outages of power plants, according to the Independent Electricity Market Operator of the Philippines Inc. (IEMOP).

In a press briefing, IEMOP COO Robinson Descanzo said the effective settlement spot prices (ESSPs) in the WESM rose to P3.25 per kilowatt-hour (kwh) in June.

ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.

While the June WESM rate was higher compared with the P2.19 per kwh ESSP in May, it was still significantly lower than the P8.98 per kwh recorded in the same period last year.

Descanzo said the rise in WESM prices month-on-month was driven by the higher demand during the month.

He said peak demand was roughly higher by 1,000 megawatts (MW) between May and June.

“Because this is the time when the enhanced community quarantine was lifted, we transitioned to general community quarantine. Some of the establishments, manufacturing plants resumed their operations,” Descanzo said.

IEMOP data showed average power supply was 13,794 MW and peak demand reached 12,611 MW in June. On the other hand, May supply was at 13,245 MW and peak demand was 11,567 MW.

Earlier, IEMOP said the power supply in June was stable due to the resumption of hydropower plant operations and lower temperature.

However, it also expected demand to increase once the quarantine measures are loosened with more commercial and industrial sectors allowed to operate.

With 60 percent of commercial and industrial sectors operating, the market operator projected power demand to increase from the 11,567-megawatt (MW) peak during the quarantine period to peak 12,153-MW peak in June.

Another factor in the rise in WESM prices was the shutdown of several power plants, which tightened electricity supply during the month.

“In the second week of June, we recorded price spikes. Aside from the higher peak demand, there were several generation plants that went on forced maintenance and were scheduled to shut down,” Descanzo said.

During the supply month, only 13 percent of the wholesale customers sourced their electricity requirements from the electricity bourse and 87 percent were from bilateral contracts.