WESM rates down in early November

WHOLESALE Electricity Spot Market (WESM) prices fell in the last two weeks on lower demand and increased supply, the Independent Electricity Market Operator of the Philippines (IEMOP) said on Wednesday.

The P8.08 per kilowatt hour (kWh) average, down from P9.22 per kWh a month earlier, was due to “ample supply margins with lesser frequency of supply price spikes, IEMOP specialist Carla Rica said in an online briefing.

Early November average demand was said to have fallen by 727 megawatts (MW) to 10,083 MW, while average supply increased by 173 MW to 13,651 MW.

In October, WESM spot prices had increased from 9.12 per kWh in September.

Coal-powered plants accounted for 58.6 percent of the generation mix, while natural gas contributed 16.6 percent. This was followed by geothermal (9.9 percent), hydro (6.8 percent), oil (3.6 percent), biomass and wind (1.1 apiece), and solar (2.1 percent.)

Average supply for October was 13,478 MW, down 0.89 percent from a month ago, while demand increased on average by 171 MW, up from September’s 10,810 MW.

“Regional peak demand of Visayas rose from 2,225 MW to 2,261 MW on a monthon-month comparison,” the IMEOP said.

“However, the Luzon peak demand somewhat decreased from 11,459 MW to 11,253 [MW] this October. Given those circumstances, the average margin for October dropped by 9.86 percent and led to the imposition of the secondary price cap (SPC) mechanism, a mitigating measure to safeguard consumers against sustained high WESM prices,”it added.

The SPC was able to cushion prices 52 percent and 53 percent of the time, respectively, for Luzon and the Visayas.

During the briefing, IEMOP also reiterated its advocacy for the efficient use of energy toward productivity. It presented a study showing that as a result of efficient use of energy, a 3-percent reduction in energy demand could be achieved, which could result to lower WESM prices and mitigation of yellow and red alerts.