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Higher demand seen likely to pull up June WESM prices

higher demand seen likely to pull up june wesm prices - Higher demand seen likely to pull up June WESM prices

PRICES at the Wholesale Electricity Spot Market (WESM) are likely to increase with demand expected to pick up as industries and commercial establishments set to resume operations in June, its operator reported.

Based on the projection of the Independent Electricity Market Operator of the Philippines (IEMOP), the trading price may rise to as much as P4.27 per kilowatt-hour (kWh) next month when businesses in Luzon and the Visayas are expected to restart 70% of their operations under general community quarantine (GCQ).

It projected peak demand at 13,368 megawatts (MW), against a stable average daily supply of 14,970 MW.

“With an increase in demand, we need more production from the next available plant. Given ‘yung offer behavior na nakikita namin ngayon (Based on the offer behavior we are seeing), the projected price with this kind of aggressive demand… tataas ng kaunti (will slightly increase) to P4.27,” IEMOP Chief Operating Officer Robinson P. Descanzo told reporters.

Between March 26 and May 26, IEMOP recorded an actual average price of P1.77/kWh with average daily supply at 13,340 MW and peak demand at 11,567 MW.

Should only 60% of industrial and commercial operations resume in June, the price is expected to settle at P1.85/kWh, or P0.11 less than the average price in May, with peak demand at 12,153 MW and the same stable average supply.

IEMOP assumed a stable supply in the month due to the expected increase in the contribution of hydropower plants in the generation mix and cooler temperature.

The outlook also considered a scenario of a power plant outage resulting in the loss of over 1,000 MW.

During the enhanced community quarantine (ECQ) between March 15 and May 15, power demand declined 15% to 10,053 MW from the pre-lockdown levels.

After most of the country transitioned into a more-relaxed quarantine on May 16, demand almost returned to the level recorded between Feb. 26 and mid-March, which was about 11,144 MW.

“Overall, during the ECQ period, bumaba iyong demand natin (demand fell) by almost 15% compared to the pre-ECQ levels. Then in the post-ECQ period nag-increase na gradually ‘yung demand (demand increased gradually),” Mr. Descanzo noted.

Meanwhile, power supply fell by 200 MW in May following multiple power plant outages and the transit of Typhoon Ambo.

This led to a tighter supply margin of 2,356 MW with supply at 13,226 MW and a total system requirement, or the combination of demand and reserve levels, of 10,870 MW. This compares with April’s 3,789 MW margin.

Coal remains the most utilized energy source during the quarantine despite a lower utilization level of 53%, compared with 70% of capacity used before entering the lockdown phase. — Adam J. Ang

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