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Electricity spot market prices rise in early December

ELECTRICITY spot market prices increased in early December to P9.12 per kilowatt-hour (kWh) from P8.53 per kWh in November, the Independent Electricity Market Operator of the Philippines (IEMOP) said on Wednesday.

“In the last week of November and early December there were issuances of yellow and red alerts which means there was a thinning margin between supply and demand; with that we saw price spikes,” Josell F. Co, IEMOP’s manager for corporate communications said in a virtual briefing on Wednesday.

The National Grid Corp. of the Philippines placed the Luzon and Visayas grid on yellow and red alert several times in last week of November and the first week of December, as power reserves thinned after power plants declared forced outages.

Supply levels declined in December, averaging 12,534 megawatts (MW) from 13,691 MW last month. Meanwhile, demand on the Wholesale Electricity Spot Market (WESM) rose to 10,499 MW in December from 10,355 MW in November.

“Overall, the electricity demand for 2022 saw a normalcy in terms of growth as compared to its previous levels in 2020 and 2021 due to the effects of the pandemic,” Mr. Co said.

As of Dec. 11, IEMOP said that electricity demand was 10,457 MW, exceeding the 10,088 MW in the corresponding period of 2019.

“We can see that the demand in 2022 and 2019 is nearly the same; we cannot compare 2020 because of the pandemic,” he said.

Mr. Co said that IEMOP is also expecting a surge in demand next year.

“If we get very high demand, we have to make more energy, so we are working with the DoE on an energy efficiency campaign… we expect demand to grow especially during the holidays,” he said.

Isidro E. Cacho, Jr. head of IEMOP’s corporate strategy and communications, said that for the rest of December the WESM price may return to P9 per kWh from the current P8 per kWh.

“Hopefully there will be no more tightening of supply in the market, that’s usually the challenge,” Mr. Cacho said.

Currently, Manila Electric Co. (Meralco) has been sourcing power from WESM after SMC Global Power Holdings Corp. issued a notice of cessation, terminating its South Premiere Power Corp. contract with Meralco, which covers 670 MW of supply or about 13.4% of Meralco’s power requirement in November.

Mr. Cacho said that the impact of the Meralco purchases will be likely felt next month.

“As regards the SMC PSA (power supply agreement) we will wait for the blended rate of Meralco (to know the full impact) of this,” he said.

ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta told reporters at an energy forum on Tuesday that Meralco customers should brace for higher electricity bills.  

“For January, (we) Meralco consumers… should brace ourselves for higher rates especially with the completion of several refunds that have tempered the high bills (recently),” she said. — Ashley Erika O. Jose

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