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.
