Average power spot market prices up in March
MANILA, Philippines — Energy prices in the wholesale electricity spot market (WESM) rose month-on-month in March amid increased demand and despite improved supply levels, according to the Independent Electricity Market Operator of the Philippines (IEMOP).
The average WESM price rose by 12.60% to P6.97 per kilowatt-hour (/kWh) in March, compared last month's level, IEMOP reported.
The market operator said their latest data covers the billing period of March 1 to March 25, 2022.
In a virtual briefing on Thursday, IEMOP Stakeholder Communications Senior Analyst Danyella Santiago said the average March demand rose month-on-month by 819 megawatts (MW) mainly due to the imposition of Alert Level 1, the least restrictive alert level status, in other provinces.
Meanwhile, average supply levels improved by 695 MW this month as generators which were on outages, resumed operations.
On March 17, the IEMOP placed a secondary price cap (SPC), a mechanism that places a ceiling on traded power when there is a spike in prices in the WESM.
The Philippine Independent Power Producers Association (PIPPA), whose member firms provide almost 80% of power to the nationwide grids, has been pushing to remove the SPC, believing that its absence will ultimately lead to competitive prices and sufficient power supply.
On Thursday, IEMOP Chief Operating Officer Robinson Descanzo said they haven't received any order yet from the Energy Regulatory Commission (ERC) to suspend the SPC.
According to a Manila Bulletin report, generation companies (gencos) reportedly met with ERC Chairperson Agnes Devanadera to discuss the lifting of the SPC. They claimed that the presence of such a price cap would make them incur losses at a time when coal, oil and gas prices are rising. The news report said the energy regulator is currently reviewing the gencos' proposal.
The WESM is a central venue where buyers and sellers trade electricity as a commodity.
To tide over any supply gaps, power distributors often buy additional power from the spot market at higher costs compared to pre-agreed supply deals. The added costs are passed on consumers.
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