Electricity spot prices up as ‘extreme heat’ overpowers supply
The prices of electricity traded on the spot market in March almost doubled as demand rose while supply weakened as several power plants performed poorly.
According to a report from the Independent Electricity Market Operator of the Philippines (IEMOP), the average electricity spot price systemwide soared by 95.5 percent to P5.34 per kilowatt hour (kWh) from P2.73 per kWh a month ago.
IEMOP is the operator of the Wholesale Electricity Spot Market (WESM), an avenue where power is traded between producers and distributors to fulfill the latter’s supply requirements.
Demand across the country increased to 13,670 megawatts (MW), 5.9 percent up from 12,904 MW in February. The IEMOP said it witnessed a strong power demand “driven by extreme heat during the first week of March.”
Supply, on the other hand, dropped 4.4 percent to 19,611 MW from 20,512 MW.
‘Derations’
The group mainly attributed the lower supply to “forced outages and derations.” The latter is when a power plant can no longer run at its original capacity, similar to a battery that loses its juice over time.
The IEMOP has yet to respond when asked about the affected facilities.
Last March 5, the National Grid Cop. of the Philippines (NGCP) placed the Luzon grid under yellow alert status as “a significant number of plants” were on unplanned or forced outages. The grid operator said at the time that eight plants were not running since February, while four were inoperative since 2024. A total of 16 plants were also operating on “derated capacities.”
About 3,300 MW were unavailable to the grid, the NGCP previously said.
All grids posted a surge in prices, with Luzon recording the biggest increase at 102.7 percent to P5.50 per kWh from P2.71 per kWh.
Demand in Luzon went up 7.1 percent to 9,713 MW, while supply decreased by 6.5 percent to 13,530 MW.
The Visayas saw spot market prices shoot up to 95.5 percent to P5.48 per kWh. This, as supply dipped to 2,365 MW, while demand increased to 1,913 MW.
Mindanao also recorded a significant jump in WESM prices at 61.3 percent to P4.39 per kWh. Its demand rose by 4.5 percent to 2,044 MW. Supply during the period likewise inched up 2.1 percent to 3,716 MW.
