Electricity spot-market rate dipped to P2.86/kWh in September–PEMC

by Lenie LecturaOctober 18, 2016

from Business Mirror

Market prices in the electricity market went down to P2.86 per kilowatt hour (kWh) in September billing period as against a month earlier, the Philippine Electricity Market Corp. (PEMC) said on Tuesday.

PEMC, operator of the Wholesale Electricity Spot Market (WESM), noted a  a considerable dip in the final effective settlement spot prices (ESSPs) for the September billing period at P2.86/kWh, from P4.17/kWh in August 2016.

ESSPs refer to the average prices paid by customers for energy bought from the spot market. The impact on consumers would depend on the distribution utility’s exposure.

WESM data also showed that coal is still the dominant fuel in the generation mix at 49.33 percent in September, while emerging renewable-energy technologies, such as solar, wind, run-of-river hydro and biomass, contributed at around 3.7 percent.

Settlement data further revealed that about 15.09 percent of total market transactions were sourced from electricity market, while the remaining 84.91 percent were procured through power-supply agreements.

“The September billing period showed a marked increase in the share of electricity bought in the spot market compared to the monthly average of 8 percent  to 10 percent sourced by wholesale customers. WESM truly works as it provides a viable option for wholesale customers in the provision of electric supply to end-users,” PEMC President Melinda Ocampo said.

Ocampo added that WESM ushers in transparency in a liberalized regime, where spikes in prices provide signals on tightness of supply condition due to forced and planned outages.

It can be recalled that WESM rates earlier shoot up following the seven instances of yellow alert and three instances of red alert in the August supply month.

ESSP for August stood at P4.17 per kWh as against July’s P3.30 per kWh.

For the July supply month, there was just one instance of yellow alert.

Taking into account the several yellow- and red-alert notices issued by the National Grid Corp. of the Philippines, the secondary price-cap mechanism was not imposed as breach of cumulative price threshold was not triggered as provided in Energy Regulatory Commission (ERC) Resolution 20, Series of 2014.

The secondary price cap and other measures, such as lowering of offer price cap and setting of offer price floor, were instituted by the Department of Energy (DOE), the ERC and PEMC to address sustained high prices and volatilities inherent in a competitive electricity market, Ocampo said.

A price cap of P6.245/kWh is imposed should the cumulative price threshold of P9/kWh be breached over a 168-hour rolling average.

“Rest assured, PEMC remains steadfast in maintaining transparency in market processes as it continues to reflect market prices that signal the supply and demand relationship,” Ocampo added.

It can be recalled that during period July 26 to August 5, there were a total of 20 power plants that failed to deliver optimum power on those days because these were either on maintenance shutdown or forced outage. Of the 20 plants, 12 were placed on maintenance shutdown, while eight went on forced outage.

These 20 plants were unable to deliver more than 4,000 megawatts