New wave of power plant outages and the recent gas output restriction at the Malampaya field triggered new round of spikes in prices at the Wholesale Electricity Spot Market (WESM), which will be subsequently passed on as rate hike in the consumers’ electric bills for October.
In a virtual briefing with the media, WESM’s Independent Electricity Market Operator of the Philippines (IEMOP) indicated that initial settlement prices in the spot market within September 4 to 13 surged to as high as P5.91 per kilowatt hour (kWh), which jumped by substantial P3.94 per kWh from last month’s effective settlement price of P1.97 per kWh.
If calculated from the last billing cycle or from August 26 to September 13, the running average price already hovers at P3.64 per kWh which is still way higher than the August price. The final billing for this supply month will be reckoned at the billing cycle cut-off on September 25.
“Earlier part of September we had price spikes because we had thin supply margin due to planned and forced outages of major plants,” said Engineer John Paul Grayda, IEMOP manager for pricing valuation and analysis.
According to the market operator, the power plants that suffered forced outages this September include the San Buenaventura coal plant; San Gabriel gas-fired power plant; Pagbilao coal plant; GNPower Mariveles coal plant; Southwest Luzon Power Generation Corporation coal plant; Limay coal-fired plant; Makiling-Banahaw geothermal plant; and the Cebu Energy Development Corporation coal plant.
The power plants on scheduled maintenance shutdown were the Masinloc coal-fired plant; Santa Rita gas plant; Kepco-SPC coal-fired power plant; and the Panay Energy Development Corporation generating facility.
Compounding the supply tightening experienced in the system was the gas restriction in the Malampaya field from August 28 to 30, the cost impact of which will also be reflected in the billing for September supply month.
“Given that we have several price spikes, we expect that the rate for September is somehow higher as compared to previous month,” the IEMOP executive said. The September settlement price in the WESM will be reflected in the electric bills for October.
Beyond the price spikes observed in traded capacities at the WESM, the market operator similarly reported that electricity demand for September already hit a peak breaching the level for the same month last year.
Grayda noted that demand peaked at 12,586 megawatts on September 8; and that already topped the 12,423 MW peak demand in September 2019. This month’s peak had climbed by 163MW or 1.3-percent higher versus the same month last year.
Engineer Robin Descanzo, IEMOP chief operating officer and trading operations head, qualified that economic activities are already ramping up as the manufacturing sector gets busier to keep pace with increased commodity demand for the coming Christmas season.
He explained that while the September 2019 peak demand had already been exceeded this month that does not automatically indicate tangible growth because the 5.0 to 6.0-percent escalation in demand projected for 2020 had not been concretized because of the crippling impact of the coronavirus pandemic.