Electricity spot prices rise in April as demand peaks

THE Independent Electricity Market Operator of the Philippines (IEMOP) said the average electricity spot market price in early April rose by P1.11 per kilowatt-hour (kWh) to P7.68 as power demand in Luzon surpassed the 2022 high recorded in May.

In a virtual briefing on Tuesday, Isidro E. Cacho, Jr., IEMOP’s head of Corporate Strategy and Communications, said Luzon’s peak demand came in at 12,221 megawatts (MW) in April, the high for the year so far, and exceeding the 2022 peak of 12,103 MW recorded in May.

“Year-to-date peak demand for all regions has breached its previous year’s peak demand level,” according to Christian Karla A. Rica, an IEMOP assistant manager for Knowledge Management Services.

Peak demand in the Visayas was 2,380 MW in April, exceeding the 2022 high of 2,297 MW recorded in September. Mindanao’s peak demand in April was 2,363 MW, exceeding the region’s 2022 peak of 2,167 MW recorded in June.

As of April 23, IEMOP said average supply was 14,612 MW against average demand of 11,033 MW. In March, average supply was 14,226 MW and average demand 10,244 MW.

Power distributors turn to the spot market when their contracted power supply is insufficient for their customers’ needs. Power generators sell their excess capacity at spot, which commands a premium over power sold via long-term contracts.

“While demand for electricity increased due to rising temperatures brought about by the summer season, the market remained stable, with ample supply levels across all grids,” IEMOP said in a statement.

Mr. Cacho said that with only two trading days remaining, spot market prices will likely settle at P7 per kWh in April, a trend possibly continuing next month.

“Given the current trends, especially with El Niño… the probability of prices remaining at the P7 per kWh level in May is high,” he added. — Ashley Erika O. Jose