Year: 2023

In a recent IEMOP briefing on the Philippine Wholesale Electricity Spot Market (WESM), the market has experienced a reduction in electricity demand coupled with improvements in supply levels translating to lower electricity prices in the spot market. Key highlights from the market operations as of December 10 reveal insights into pricing, generation sources, and upcoming initiatives.

Despite an 84MW increase in demand from the previous billing month, the WESM average price as of December 10 decreased by 0.22 PhP/kWh. The Luzon region saw a decrease of 0.11 PhP/kWh, Visayas by 0.52 PhP/kWh, and Mindanao by 0.5 PhP/kWh. Lower clearing prices during this period can be attributed to the combination of lower offer prices from generator participants, potentially influenced by the decline in global fuel prices. Additionally, supply improved as generating plants completed their annual maintenance program together with notable higher supply availability from wind power plants which is mainly prompted by the Amihan season, contributed significantly to this scenario.

In the November billing month, wind output witnessed a substantial increase of 102 GWh, marking a 1.4 times surge compared to the previous month. The system supply in Luzon, Visayas, and Mindanao continues to be dominated by coal and natural gas, accounting for 76% of the total generation. Geothermal and hydro contributed 8.9% and 8.3%, while solar and biomass plants witnessed considerable increases in their energy shares, reaching 221 GWh and 95 GWh, respectively.. Improved supply levels also reduced the dispatch of diesel plants and this contributed also to the lowering of market prices especially during peak demand periods.

Customers purchased 18.2% of the total metered consumption of 8,949 GWh in November 2023 from the spot market at an ESSP rate of 4.39 PhP/kWh. Up from the 16.9% last October billing month. The ESSP also represents a decline from the October rate of 6.94 PhP/kWh. Presently, the Independent Electricity Market Operator of the Philippines (IEMOP) is gearing up for the commercial operations launch of the Reserve Market this December 26, 2023.

The Wholesale Electricity Spot Market (WESM) has experienced a notable decline in prices during the first two weeks of the September billing period, as reported by the Independent Electricity Market Operator of the Philippines (IEMOP) during its latest media briefing. This decline is primarily attributed to ample supply margins and tamer demand compared to the summer months.

In Luzon, average demand dropped from 9,480 MW to 9,119 MW, resulting in a decrease in spot market prices from 5.53 PhP/kWh in August to 4.12 PhP/MWh in September. Similarly, Visayas witnessed a decrease in average demand from 1,872 MW to 1,850 MW during the comparative billing periods. Consequently, the average WESM price saw a reduction of 0.25 PhP/kWh, declining from 6.18 to 5.93 PhP/kWh. Meanwhile, in Mindanao, a decrease in the average supply margin of 358 MW, attributed to the deration and outage of some generators, led to a price increase from 4.82 PhP/kWh in August to 5.81 PhP/kWh in September.

IEMOP attributes the lower demand to the ongoing rainy season, resulting in supply sufficiency across all three major grids in the Philippines. Luzon and Visayas exhibited supply margins of 3,845 MW and 273 MW, respectively, while Mindanao maintained a supply margin of 842 MW. Coal remained the predominant energy source in Luzon, serving approximately 57.5% of demand, followed by natural gas at 22.8%. Notably, the contribution from Renewable Energy (RE) plants increased to 17.2%, up from 12.9% in July, primarily due to heightened output from Hydro and Wind power plants. In Visayas, RE resources contributed 43.9%, while Coal and Oil-based plants accounted for 56.1% of the energy mix. In Mindanao, Coal retained its dominance with 60.2%, followed by contributions from Large Hydro plants at 33.7%.

Out of the total metered consumption of 9,124 GWh in August, 20.4% of the energy was purchased by customers in the spot market at an effective rate of 5.87 PhP/kWh. The spot market volume increased by 2.6% from the previous July 2023 spot market volume of 17.8%.

During the media briefing, IEMOP provided an update on the status of the Reserve Market. At present the Reserve Market Trial Operations Program is ongoing. Once the Department of Energy declares the start of commercial operations, IEMOP shall execute the final preparations in coordination with the System Operator and Ancillary Services Providers for the eventual launch of the Reserve Market Commercial Operations this year.

The Independent Electricity Market Operator of the Philippines (IEMOP) has reported a notable decline in electricity spot prices in the Luzon and Visayas grids from June to the first half of July due to decreased power demand during the period as a result of the rainy season and tropical depression Dodong. Despite intermittent hot weather caused by El Niño weather conditions, overall demand for electricity went down, leading to an 8.9% decrease in spot prices or Php 6.07 pesos per kilowatt-hour, for the Luzon and Visayas markets compared to the previous month’s Php 6.67 pesos per kilowatt-hour. On the other hand, spot prices in Mindanao saw a slight increase of 0.49 PhP/kWh to PhP3.83 per kilowatt-hour compared to June’s PhP 3.34 pesos per kilowatt-hour. Despite the slight increase, this is still 38.33% lower than the preceding summer month of May. The tamer demand levels also resulted in reduced imposition of the secondary price cap.

As the energy sector adapts to the cooler weather, market data for July reveals a decrease of 155 MW in average electricity demand for Luzon and Visayas, dropping from 11,641 MW in June to 11,486 MW. Meanwhile, Mindanao experienced a slight increase in average demand from 1,805 MW to 1,809 MW. Despite the decrease in demand, however, a new peak demand record of 12,522 MW was set in Luzon on July 6, 2023, at 2:15 PM, which was 3.5% higher than the previous year’s peak recorded on May 12.

On the supply side, no significant issues have been encountered resulting in ample average supply margins for the Luzon-Visayas and Mindanao grids. Supply margins for Luzon-Visayas stood at 2,935 MW while for Mindanao they averaged 1,261 MW. The generation supply mix in Luzon and Visayas for June 2023 was also boosted with increased contribution from the natural gas plants at 17.1%. Contribution from hydro and wind plants also noted an increase to 4% and 0.7%, respectively. While the contribution from oil plants was reduced to 1.4%.

In addition, IEMOP provided an update on the ongoing trial operations program (TOP) for the Reserve Market. The registration of AS-certified plants for the TOP commenced on June 26, 2023. The Reserve Market TOP is scheduled to run for three months, ensuring the preparedness of market participants, the System Operator, as well as the Market Operator. The remaining tasks for the Reserve Market include the approval of the Price Determination Methodology and necessary software certification audits. These tasks are expected to be accomplished in the coming months resulting in the anticipated commercial operations of the Reserve Market towards the end of this year. The Reserve Market is expected to enhance the reliability and security of delivering power from generators to consumers through its optimal and responsive mechanism for scheduling regulating, contingency and dispatchable reserves.

The Independent Electricity Market Operator of the Philippines (IEMOP), the operator of the Wholesale Electricity Spot Market (WESM), reported a decline in WESM prices during the first two weeks of June billing month.

The decrease in prices can be attributed to several factors, including a reduction in demand and a modest increase in supply. According to IEMOP’s data, the average WESM price in Luzon and Visayas experienced a drop of 1.73 pesos per kilowatt-hour during the initial two weeks of the June billing period, dropping from 8.83 PhP/kWh in May to 7.10 PhP/kWh in June. This decline coincided with a notable increase in the average supply margin, which reached 2,833 megawatts. This represents a substantial 595-megawatt rise from the previous month’s figures. The increased supply margin indicates improved market conditions, with an adequate electricity supply available to meet consumer demand. Similarly, Mindanao exhibited a comparable trend, with the average WESM price decreasing to 3.29 PhP/kWh in June from 6.21 PhP/kWh the previous month.

Additionally, IEMOP reported a significant development in the transmission system with the energization of the Balsik-San Jose 500kV Transmission Line. This new addition has alleviated previous constraints in power flow from Bataan to Bulacan, which had caused limitations in supplying power to Metro Manila. With the energization of this 1195-Megawatt line, congestion in the area has been addressed, and market participants can expect a more stable and predictable pricing environment. Since its implementation, there have been no recorded instances of congestion in the area.

Furthermore, progress continues with the testing of the MVIP (Mindanao-Visayas Interconnection Project), which commenced on April 30, 2023, at an initial load of 22.5 megawatts. The load test will gradually increase until it reaches its full transfer capacity by the third quarter of this year.
To further augment the energy supply for June, operations have resumed at the Ilijan Power Plant in Batangas, utilizing liquefied natural gas. This comes as a response to the rapidly increasing demand, ensuring a more robust energy supply for June and beyond.

In May, the Effective Spot Settlement Price (ESSP) in Luzon and Visayas stood at PhP 9.30/kWh. This reflected a peak demand increase of 2.6 % in Luzon, and 6.9% in Visayas compared to 2022. Coal accounted for 64.4% of the generation mix, followed by natural gas and geothermal sources. Additionally, due to tight supply margin conditions, there was an increased contribution from oil-based plants to meet the region’s energy demands. Meanwhile, in Mindanao, the ESSP rose to PhP 7.08/kWh compared to PhP 5.80/kWh in April. This also represented an increase of 11.5% versus the 2022 peak demand level in the region. The energy mix in Mindanao primarily consisted of coal, hydro, and geothermal power sources.

During its media briefing, the Independent Electricity Market Operator of the Philippines (IEMOP) discussed its updates on the Philippine Wholesale Electricity Spot Market (WESM) in Luzon, Visayas, and Mindanao regions covering the March and April billing months. While demand for electricity increased due to rising temperatures brought about by the summer season, the market remained stable, with ample supply levels across all grids.

The Luzon and Visayas markets recorded an average demand increase from 10,244 MW in March to 11,033 MW in April 2023. Meanwhile, for Mindanao, the average demand increased from 1,752 MW to 1,790 MW. The increase in demand led to the recorded year-to-date peak levels in all grids. Luzon demand recorded a new peak at 12,221 MW on April 19, 2023, while Visayas demand peaked at 2,380 MW on April 17, 2023. Mindanao also recorded a new peak demand of 2,363 MW on April 19, 2023. These figures showed an increase of 6% for Luzon and 10% each for Visayas and Mindanao regions compared to the same period last year.

Despite the increase in demand, supply levels for Luzon and Visayas improved from 14,226 MW in March to 14,612 MW in April, as fewer generators were scheduled for an outage. On the other hand, Mindanao recorded ample supply levels at around 3,018 MW for March and April. However, market prices increased from 6.57 to 7.68 pesos per kilowatt-hour from March to April 2023 billing periods for Luzon and Visayas. In contrast, the market price for Mindanao went down from PhP6.56/kWh in March to PhP 5.36/kWh in April.

IEMOP emphasized the importance of energy efficiency and conservation in managing the electricity market, especially during peak demand periods. Consumers are encouraged to practice energy-saving measures such as turning off lights and unplugging appliances when not in use. By working together, consumers and the energy sector can ensure a stable and reliable electricity supply while keeping costs reasonable for all. Overall, the IEMOP remains committed to providing efficient and reliable electricity market operations to all WESM stakeholders and will continue to closely monitor the supply, demand, and prices in the coming months.

The Independent Electricity Market Operator of the Philippines (IEMOP) announced the successful first month of Wholesale Electricity Spot Market (WESM) operations in Mindanao during its monthly media briefing. IEMOP reported an Effective Spot Settlement Price (ESSP) of 5.23 PhP/kWh in the first billing month of Mindanao WESM operations this February, reflecting a competitive price in the electricity market. This result may be attributed to a significant supply margin averaging at 1,429 MW in the region, reflecting a surplus in available capacity compared to an average demand of only 1,745 MW. The majority of Mindanao customers’ requirements were served by coal plants at 62.54%, followed by hydro plants at 30.39%, and geothermal plants at 4.44%, with 13.90% of total consumption (1,142 GWh) bought through the WESM.

IEMOP also highlighted the successful scheduling and dispatch of generators during the first month of WESM operations, which employed an optimal and rules-based scheduling process that resulted in a more secure and reliable electricity supply in the Mindanao grid. The Market Operator also mentioned that it is continuously providing 24/7 operational support to Mindanao trading participants and conducting roadshows, focus group discussions, and training to enhance their understanding of market operations. Additionally, IEMOP is working closely with the stakeholders to facilitate full compliance with the pending WESM registration requirements before the three-month relaxation period on 25 April 2023, as the DOE prescribes in its circular declaring the commercial operations of WESM in Mindanao.

IEMOP also announced that it will hold the first-ever Philippine Electric Power Industry Forum (PEPIF) this coming March 20-21, 2023, at the Diamond Hotel Manila. The two-day event, hosted by IEMOP in coordination with the Department of Energy and the Energy Regulatory Commission, will bring together industry leaders, decision-makers, and professionals to discuss challenges and opportunities, share best practices, learn from experts, and explore the latest trends in the Philippine electric power industry.

“We are excited to provide a platform for industry stakeholders to collaborate, innovate, and address the challenges facing the Philippine electric power industry,” said Engr. Robinson P. Descanzo, IEMOP’s Chief Operating Officer. “The PEPIF is an excellent opportunity to learn from experts, share best practices, and explore innovative solutions that will benefit all Filipinos.”

The Wholesale Electricity Spot Market is starting the year off with a significantly lower price, averaging at 5.76 PhP/kWh for January 2023. This represents a significant 31.59% decrease or 2.66 PhP/kWh from the December billing period, which stood at 8.42 PhP/kWh. The decrease in market price can be attributed to an increase in average supply of 1,347 MW, coupled with a decrease in average demand of 914 MW. This resulted in a supply margin increase of 4,979 MW, or 83.25%, compared to last month’s 2,717 MW.

In addition to the decrease in average market price, January also saw fewer price spikes compared to the previous two months. The holiday season, along with persistent cold weather, led to a 9% decrease in average demand, down to 9,253 MW, compared to the 10,167 MW recorded in December. Peak demand for January also decreased by 10.29% to 11,656 MW, compared to the 12,993 MW recorded from the previous billing period.

With lower prices, the quantities of electricity bought from the market increased to 15.1% from the previous 13.6%, with the rest of the consumption being settled outside the market based on their contract price. The total energy produced also showed a downward trend in the last quarter of 2022 up to January 2023. Coal remained the top contributor to the generation mix in the first billing period of 2023, with a 58.1% share, or 3,858 GWh, followed by Natural Gas at 16.8%, or 1,116 GWh. Renewable energy resources generated a total of 1,622 GWh, or around 22.73% of the total.

The Independent Electricity Market Operator of the Philippines (IEMOP) likewise mentioned that the WESM Mindanao successfully went on commercial operations last 26 January 2023 with a total registered capacity of 4,326 MW. The registered Mindanao trading participants include 43 Generation Companies, 28 Electric Cooperatives, 4 Private Distribution Utilities, 12 DirectlyConnected Customers, and 10 Metering Services Providers. With a peak demand reaching only about 2,167 MW, a large supply margin of about 2,000 MW was noted in the Mindanao WESM.

A ceremonial launching of WESM in Mindanao was also held last 6 February 2023 at the Malacañan Palace led by His Excellency President Ferdinand R. Marcos, Jr. wherein he noted, “This is, indeed, a significant leap as we endeavor to achieve a reliable, secure and competitively priced electricity supply for our consumers”. The Chief Executive also added, “I believe that this is a very important step and in rationalizing our power capacity, our power distribution, and hopefully with an eye also to the lowering prices of fuel in the world market that this will lead to a lower cost not only for our industrial partners but also for our household consumers.”

In its media briefing, IEMOP also announced the holding of the first ever Philippine Electric Power Industry Forum (PEPIF) in coordination with the DOE and the ERC. This two-day event scheduled in March 20-21, 2023 at the Diamond Hotel Manila will bring together industry leaders, decision makers and professionals to discuss challenges and opportunities, share best practices, learn from experts, and explore the latest trends in the Philippine electric power industry. The forum also aims to strengthen collaboration and forge partnerships among industry participants in support of the objectives of the EPIRA, as well as to accelerate programs under the Philippine Development Plan 2023-2028.