Prices in the Wholesale Electricity Spot Market (WESM) remained low for the first two months of the year, at 2 P/kWh level. The Independent Electricity Market Operator of the Philippines (IEMOP) reported that low prices in the market can be attributed to the sufficient generation supply and stable demand levels, as the imposition of community quarantine protocols continue combined with the persistence of cold weather conditions due to La Niña.
The Spot Price for the beginning of February recorded a decline by around 15% as the price for the first two months decreased from 2.61 P/kWh to 2.22 P/kWh, respectively. This was mainly due to the slight increase in the available supply despite the 3.6% reduction in the generation of coal power plants in January brought about by plant outages. The decline in coal generation translated to a higher generation from Natural Gas, Geothermal, and Hydro power plants.
Coincidentally, an increase in the system peak demand for February has been observed for Luzon and Visayas, but these are still lower than 2020 levels. On a regional level, Luzon registered a peak demand of 9,124 MW for January and 9,544 MW for February; while Visayas recorded 1,910 MW and 1,941 MW, respectively, for the same period.
As for January market transactions, total generation was recorded at 5,973 GWh which is still below the 2020 level by 5.3% or approximately 336 GWh. Spot percentage for January slightly decreased to 9.7% from 10.6% of the preceding month, while the Effective Settlement Spot Price (ESSP) cleared at 2.58 P/kWh.
In preparation for the upcoming summer season, IEMOP also discussed the possible scenarios and outlook covering the periods of 26 February to 25 June 2021. The simulation considered the generator outages from the latest available Luzon and Visayas Grid Operating Program (GOP). Based on the simulation results as well as the premise that no major unplanned outages will occur during the period, prices are projected to remain at 2 P/kWh level during the summer months.
The Market Operator also gave updates on the implementation of 500 kW minimum average peak demand threshold for participating in the Retail Competition and Open Access (RCOA). IEMOP reported the registration of 13 new end-users to the competitive retail electricity market. Previously set to 750 kW, the threshold for RCOA eligibility was reduced to 500 kW by the Energy Regulatory Commission (ERC) effective 26 February 2021.
Under the Retail Competition and Open Access (RCOA), end-users are provided with the option to source their electricity from competitive Retail Electricity Suppliers.
