The average price of power bought at the Wholesale Electricity Spot Market doubled to P7.72 per kilowatt-hour (kWh) in May, said WESM operator Independent Electricity Market Operator of the Philippines (IEMOP).
In a briefing on Thursday, May 27, IEMOP said demand for electricity increased due to warmer temperatures, while supply tightened as unplanned generator outages persisted.
In May, 33 generators had to shut down – more than half or 18 of which were unplanned.
The average demand for power reached 11,091 megawatts in May, while supply remained tight at 13,219 MW.
System peak demand was recorded on May 20 at 13,660 MW – higher than 2019 and 2020 levels at 13,450 MW and 13,181 MW, respectively.
IEMOP manager for pricing valuation and analysis John Paul Grayda said secondary price caps had to be implemented, to prevent spot prices from shooting up. Price caps were imposed from May 4 to 7 and from May 20 to 22.
For the coming months, IEMOP sees spot prices decreasing if supply remains steady based on typical generator offers and outages from the government’s grid operating program.
In this scenario, IEMOP has already accounted for the limited supply of Ilijan 1 and 2 to 855 MW from 1,2000 MW due to natural gas restrictions and GNPD 1 to 6,000 MW due to testing and commissioning.
For June, IEMOP forecasts peak demand at 14,172. Average spot prices during that month could be lower at P4.94 per kWh if the average supply would be around 11,757 MW.
But if forced outages lead to 1,000 MW in lost capacity, then spot prices are seen to increase to P8.28 per kWh in June.
Shorter trading interval dry run
Starting Saturday, May 29, IEMOP will test the long-awaited shorter trading interval from one hour to five minutes for WESM.
IEMOP said the limited live dispatch operations or LLDO will happen for a week until June 4, which will serve as a dry run prior to the commercial operation of the enhanced WESM design and operations (EWDO).
The LLDO is meant to assess the capability of the generators, system operators, and the market operator in implementing the five-minute dispatch schedules from the new market system.
All generator trading participants in Luzon, the Visayas, and even Mindanao – whose WESM is set to be launched in June together with the EWDO – are expected to implement dispatch schedules generated from the new system.
The Department of Energy has set commercial operations for the EWDO on June 26, subject to certification of the Philippine Electric Market Corporation. – Rappler.com