Philippines: Power spot prices hit 5-year low

Philippines: Power spot prices hit 5-year low

Prices at the country's electricity spot market hit a five-year low in
November due to the continued stability of power supply and lower demand
caused by cooler temperature.

The Philippine Electricity Market Corp. (PEMC) announced yesterday its
effective settlement spot prices (ESSPs) on the wholesale electricity spot
market (WESM) in November dipped to P2.27 per kilowatt-hour (kwh), the
lowest since January 2011.

ESSPs refer to the average prices paid by wholesale customers for energy
purchased from the spot market.

"The decrease in WESM prices was driven by higher energy volume offers in
the market and colder temperature," PEMC president Melinda Ocampo said.
"Such a sharp decline in the market prices is welcome as long as wholesale
customers like distribution utilities pass on the historically low market
prices to their end-users."

In terms of billing, 19 percent of total energy transactions were sourced
from the spot market while the 81 percent were supplied through bilateral
contracts.

The amount wholesale customers sourced from the market is the highest since
March 2009.

For the month, market data reflected coal resource accounted for 47.42
percent of the generation mix while natural gas and diesel/oil made up 25.44
percent and 0.89 percent, respectively.

Meanwhile, renewable energy resources contributed 26.25 percent, broken down
into 12.49 percent for geothermal, 9.25 percent for hydropower, 2.16 percent
for wind, 1.4 percent for solar and 0.95 percent biomass.

For the whole year, WESM prices have been on a downtrend. The trend is
expected to continue in the early part of 2017 as cooler temperature will
continue in January and February, Ocampo said.

There is also adequate capacity from old and new power generators,
particularly from renewable energy projects, she said.

"You can see that there is a lot of available capacity at this time," Ocampo
said. "RE also has a big impact in lowering prices, because of the must
dispatch and priority dispatch (order)."

The coming year will also see PEMC's involvement in the full implementation
of retail competition and the establishment of WESM in Mindanao, the PEMC
official also said.

"The recent developments in the electricity market underpin PEMC's efforts
in establishing a competitive, efficient, transparent and reliable market
where prices are governed as practicable by commercial and market forces,"
Ocampo said.

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Link to Original Article:
http://www.philstar.com/business/2016/12/20/1654994/power-spot-prices-hit-5-
year-low

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com