Filipino consumers will likely have an extended “financial respite” in their next electricity bill, as price trends point to continued softening of prices in the Wholesale Electricity Spot Market.
In a briefing with the media, Engineer John Paul Grayda, manager for Pricing Validation and Analysis of the Independent Electricity Market Operator of the Philippines (IEMOP) indicated that settlement prices in the spot market hovered at P1.75 per kilowatt hour (kwh) within December 1-10 this year, despite the manifest increase in demand.
The initial average price for December had been a downtrend from the P1.87 per kWh in November; and also way lower than the P1.97 per kwh in October.
In terms of average demand, there had been slight increase of less than 200 megawatts (MW) in the first 10 days of December to 9,415MW vis-a-vis the November average of 9,219MW – and that was generally attributed to increased economic activities.
The executives of IEMOP, nevertheless, specified that there’s no certainty yet if the demand uptick will be sustained throughout the month – especially when Filipinos would already settle for their vacation during the Christmas season.
On a peak-demand basis, the electricity spot market operator emphasized that it was still higher in November at 11,859MW versus what preliminarily manifested in December at 11,485MW; and it was way higher in October at 12,259 MW.
“Luzon peak demand decreased for both November and December as opposed to the same periods last year,” IEMOP noted, emphasizing that the declines had been 509MW in November and 440MW in December.
Last month’s WESM settlement prices had been generally affected by weather disturbances; while for the month of December, it is seen that the persisting cold weather will result in sustained depressed demand.
With cooler temperatures, consumers will not be switching on their air-conditioning devices for a longer period of time; hence, that will result in overall lower demand in the system. And consequently for the end-users, that will redound to cheaper rates.
Additionally, the WESM had seen escalation in the generation capacity of hydro and wind plants in November and December; while coal’s contribution in the generation mix had declined in the last 2-3 months.
“As colder weather conditions persist for November, hydro plants’ contribution in the generation mix continued to increase for the month from 6.2-percent to 8.9-percent; and wind plants from 1.3-percent to 2.1-percent,” the spot market operator pointed out.