Power spot prices hit lowest since 2020 – IEMOP

MANILA, Philippines — The average cost of power in the country’s spot market has declined to its “most affordable” level in five years, according to the Independent Electricity Market Operator of the Philippines.

IEMOP reported that the average price in the Wholesale Electricity Spot Market (WESM) stood at P4.14 per kilowatt-hour in the first half, marking a 26-percent drop from last year’s average of P5.58 per kWh.

“(This marks) the most affordable average market price since 2020. This price drop translates to more competitive electricity costs for Filipino consumers and businesses,” the market operator said.

The downtrend, IEMOP said, was a result of improving supply margins, growing renewable energy (RE) capacity and continued investments in transmission infrastructure. 

In the generation sector, IEMOP said policy issuances set the stage for the development of both conventional and new technologies to bolster the country’s energy supply. 

WESM, the centralized venue for electricity trading, saw overall RE capacity increase by 1,000 megawatts (MW), driven by the entry of green energy auction projects.

Most natural gas plants were also said to have offered their maximum capacities, with average capacity reaching 3,674 MW.

“These figures imply increased reliability of generation companies, resulting in an improved and more reliable supply that can be used by the grid,” IEMOP said.

Also contributing to lower power rates were the improvements in the transmission system that led to “reduced congestion and market clearing by more inexpensive sources,” it said.

 Around 10,260 MW of transmission capacity remained available across the country, most of which was in Luzon, latest data from the National Grid Corp. of the Philippines showed.

 “Lowering electricity prices is an industry concern requiring an industry-wide collaborative response,” IEMOP president and CEO Richard Nethercott said.

“And as shown by market results in the last six months, a collective effort of all stakeholders can indeed lower market prices,” he added.

 Nethercott likewise lauded the government for implementing sound policy and a legal framework that effectively guides private stakeholders in advancing their initiatives.

 The National Association of Electricity Consumers for Reforms Inc., meanwhile, urged the Energy Regulatory Commission to “actively review” the rates charged by power utilities to ensure consumer protection.