MANILA, Philippines — Average electricity prices in the Wholesale Electricity Spot Market (WESM) dipped in February as a surge in available power supply in Luzon provided a necessary cushion for the national grid, according to the Independent Electricity Market Operator of the Philippines (IEMOP).
- System-wide Rate: Dropped by 1.8% to ₱3.50 per kilowatt-hour (kWh), down from ₱3.56 in January.
- Supply Growth: Available supply improved by 4.4%, reaching 19,992 megawatts (MW).
- Demand Growth: Overall demand rose by 3.1% to 12,874 MW.
- Regional Disparity: While the national average fell, the price relief was only felt in Luzon. Rates in the Visayas and Mindanao actually increased significantly due to tighter supply and plant outages.
- Luzon (The Price Driver): WESM prices in Luzon plummeted by 17.2% to ₱2.69 per kWh (from ₱3.25). This was attributed to several power plants returning to service after planned maintenance, creating a supply margin of 732 MW that absorbed a 5.2% increase in regional demand.
- Visayas: Rates surged by 26.6% to ₱5.37 per kWh. The region suffered from a 4.4% decrease in supply caused by forced outages. Additionally, the transmission lines from Luzon were frequently at their limit, preventing cheaper power from flowing south.
- Mindanao: Prices rose by 23.2% to ₱5.25 per kWh. Supply in the region fell by 3.2% due to disruptions in coal and hydro-power plants.
Despite the February dip, the Energy Regulatory Commission (ERC) issued a warning on Friday, March 6, that the ongoing conflict in the Middle East poses a major threat to future electricity rates.
- Oil-Based Plants: Tighter supply conditions often require the dispatch of oil-based power plants. With global oil prices breaching $100 per barrel, these “marginal-cost” plants will drive WESM prices significantly higher in the coming months.
- Fuel Mix: As of February, coal still dominated the mix at 54.7%, while renewable energy contributed 27%.
While spot generation prices fell, consumers may not see an immediate decrease in their total bills. Earlier in February, the National Grid Corporation of the Philippines (NGCP) announced that transmission rates would actually rise by 13.55% due to regulator-approved under-recoveries, potentially offsetting the gains made in the spot market.
