IEMOP’S Statement Regarding News Articles Misrepresenting its Market Outlook Assumptions on Coal Supply as Factual Events – IEMOP

09 May 2020

IEMOP’S Statement Regarding News Articles Misrepresenting its Market Outlook Assumptions on Coal Supply as Factual Events

In light of the recent news articles apparently citing scenarios from our Special Report entitled “First 30 days of WESM Operations under COVID-19 Enhanced Community Quarantine”, IEMOP wishes to inform its participants and stakeholders that the scenarios mentioned were merely projections or simulations considering several demand and supply scenarios. This fact was even emphasized in the course of the Market Outlook Post-ECQ, to wit:

With the extended implementation of the Enhanced Community Quarantine up until at least April 30, IEMOP prepared several market outlooks considering post-ECQ conditions. Several demand and supply scenarios were considered from April 15 until 25 May 2020.

Assuming the ECQ is lifted after 30 April 2020, a gradual increase in electricity demand is expected. Under this demand scenario, generation supply levels will continue to be adequate. However, average market prices are projected to be PhP1.83/kWh for April 2020 and PhP6.68/kWh for May 2020. Additional scenarios were also simulated wherein the ECQ was extended to 10 May 2020. The result of the simulation indicate that ample generation supply will prevail and this will result to slightly lower prices of around PhP4.30/kWh for May 2020.

On the other hand, with coal plants dominating the supply capacity mix in the WESM, supply scenarios considering the restriction of coal generation by about 600 MW were also simulated. The restriction of supply from coal plants may be a result of logistical delays in the transportation and delivery delays of coal brought about by the ECQ. During such scenario, power plants utilizing available indigenous fuel (i.e. geothermal, hydro, and natural gas) will be maximized. The result of the simulations indicates that supply will continue to be sufficient. However, increase in market prices were observed.

With this, IEMOP reiterates its full commitment in carrying out its core values of independence, integrity, fairness, competence, and accountability to ensure competition and continuous electricity trading at the least-cost manner. The Market Outlook was prepared by the Market Operator to provide insights to the WESM participants and stakeholders on the possible impact of the different demand and supply assumptions to the market prices.

IEMOP acknowledges the role of the media in apprising the public with truthful and accurate facts that will lead to informed and sound judgments and decisions. Any article misrepresenting the Market Outlook that tend to mislead the public and cause panic and conflict, especially during this time, is highly reproachable. The public is therefore advised to be more circumspect and discerning in dealing with this kind of article.

Rest assured, the Market Operator is open to any clarification regarding its Market Outlook and will continuously conduct engagements, training programs, and other related opportunities to clarify, inform, and update its participants and stakeholders on the latest market initiatives and developments.