Power spot market prices to remain low

MANILA, Philippines — The Independent Electricity Market Operator of the Philippines (IEMOP) expects wholesale electricity spot market (WESM) prices to remain generally low this year despite an increase in demand.

In a virtual briefing yesterday, IEMOP manager for pricing valuation and analysis John Paul Grayda said spot market prices are projected to reach as low as P2.20 per kilowatt-hour and as high as P3.70 per kwh this year.

Grayda said these prices are near, if not similar, to the ESSP recorded last year when most of the country was placed under strict quarantine protocols due to the coronavirus (COVID-19) pandemic.

The effective settlement spot price (ESSP) averaged P2.61 per kwh this month, 9.5 percent lower year-on-year.

Power demand is seen to increase by five percent this year but will not breach the peak demand of 13,181 megawatts reached in March last year, prior to the implementation of lockdown when demand plunged significantly, Grayda said.

Based on IEMOP’s data, January 2021’s peak demand only reached 11,015 MW versus 11,663 MW in January 2020.

The WESM operator also projected a 11,431 MW peak demand in February, 11,847 MW in March, 12,229 MW in April, 12,611 MW in May and in June.

IEMOP chief operating officer Robin Descanzo said the pandemic has limited the increase in demand last year, which is seen to spill over into this year.

Prior the pandemic, he said the market operator projected a five percent increase in power demand in 2020 and another five percent this year.

However, the restriction in movement drove actual power demand last year to remain below 2019 levels, Descanzo said.

Moreover, new capacities are expected to come in this year, including the the 2x668-MW supercritical coal-fired power plant of GNPower Dinginin Ltd. Co. in Mariveles, Bataan.

“We have enough supply even if demand increases by five or seven percent this year from the 2019 level,” Descanzo said.

After this year, new capacities should be completed to meet growing demand, he said.