Spot electricity rates jump due to power outages

The prices of electricity traded at the spot market jumped by 15.3 percent to more than P4 per kilowatt hour (kWh) in August following widespread plant outages, particularly in the Visayas.

In a media briefing on Wednesday, the Independent Electricity Market Operator of the Philippines (IEMOP) said that the systemwide power rates had risen to P4.59 per kilowatt-hour (kWh) from the previous month’s P3.99 per kWh.

Demand was higher by 1.7 percent to 14,052 megawatts (MW) while the supply during the period weakened by 0.7 percent to 20,611 MW.

IEMOP operates the Wholesale Electricity Spot Market, an avenue where power is traded between producers and distributors to boost their supply.

Consumers are expected to feel the rate increase in the generation charges in their billing this September.

Spot market prices in Luzon dropped by 4.1 percent to P3.76 per kWh as supply slightly went up, supporting the demand.

However, the Visayas recorded a steep increase of 45.7 percent to P6.40 per kWh as it posted a 5-percent drop in supply.

Mindanao, meanwhile, logged an even higher increase of 75.4 percent to P6.66 per kWh, still due to weaker supply.

The group blamed the rate hike on the outages of several coal power facilities and the shutdown of biomass facilities in the Visayas, which had prompted the country’s grid operator to place the region under a yellow alert for three days.

It also noted the unavailability of some coal plants in Mindanao, resulting in the declaration of a “yellow” alert.

In a yellow alert, the power supply can still meet demand, but it will serve as a warning that when a plant breaks down one way or another, it will result in brownouts.

“Coincident forced and planned outages of cheaper plants during the second week of the August billing period led to overall price increases,” it said.

IEMOP officials earlier hinted of a potential rate increase amid the power scenario in the Visayas last month.

To address the situation, the Department of Energy previously ordered generation firms to ensure the immediate restoration of their generation facilities.