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Thursday, May 30, 2024

Power market prices up due to outages, says market operator

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Power rates showed an increase when the red and yellow alerts were imposed in the Luzon and Visayas grids last week due to insufficient power generating capacity, data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed. 

IEMOP data showed that system-wide prices went up to P13.65 per kilowatthour (kWh) on April 18, the third day of continuing red and yellow alerts.

The IEMOP operates the Wholesale Electricity Spot Market, the trading floor of electricity.

“Note that these prices are still subject to pricing validations/corrections which will  be done towards the end of the current WESM billing month. Effective WESM rates  are computed based on the total monthly spot transactions,” IEMOP said in its advisory.

Department of Energy (DOE) Secretary Raphael Lotilla said the second price cap (SPC) helped mitigate the high prices at the spot market. 

The SPC was implemented to protect consumers from the unwarranted increase in electricity prices brought about by inherent volatile market price movements at WESM.

“We won’t know until the billing period comes in but as you know, we have a secondary price cap and it is when the price triggers occur In the market,” Lotilla said.

“We have to encourage more power supply to be delivered in the system and we have to review this secondary price cap. At the end of the day, what is more costly to the consumers is the lack of power and not the power rates,” he said.

On April 18, the price in the Luzon grid averaged P13.39 per kWh, Visayas at P14.64 per kWh and Mindanao at P12.45 per kWh.

This reflected a significant increase from the systemwide price of P7.97 per kWh and P6.14 per kWh on April 16 and April 17, respectively.

Luzon’s average price was at P8.12 per kWh, Visayas at P8.29 per kWh and Mindanao at P6.52 per kWh on April 17 compared to P5.55 per kWh, P5.73 per kWh and P5.44 per kWh for the said grids on April 16. 

The IEMOP said the system peak demand  reached 18,256 MW on April 17,  at 1450H with a supply  of 20,108 MW. 

“While the margin of supply is currently meeting demand, localized power  interruptions have been experienced in areas of extremely high demand,” it said. 

The IEMOP said it supports the DOE’s campaign to implement energy conservation  measures and optimize energy usage during peak hours in both businesses and households.

The red alert was imposed by National Grid Corp. of the Philippines from April 16 to April 19 during selected hours for both Luzon and Visayas grids. 

On April 20, NGCP still imposed a yellow alert for the Luzon grid as 22 power plants went on forced outage.

A red alert status is issued when power supply is insufficient to meet consumer demand and the transmission grid’s regulating requirement.

A yellow alert is issued when the operating margin is insufficient to meet the transmission grid’s contingency requirement.

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