Average prices at the electricity spot market dropped to as low as P1.50 per kilowatt-hour in April, the lowest recorded, due to low demand during the month in the wake of the enhanced community quarantine rules.
“The entire month of April is under ECQ and the average price is estimated at P1.50 per kwh,” Robinson Descanzo, chief operating officer of the Independent Electricity Market Operator, operator of the country’s Wholesale Electricity Spot Market.
Descanzo said March charges covered only half of the ECQ, thus the average price in March was P2.47 per kilowatthour.
The government imposed the ECQ from March 15 to April 15 and extended to to May 15 to help “flatten the curve” of coronavirus disease infections.
“The whole of April was under ECQ thus the market resulted to the estimated price of P1.50 per kWh because we just completed the settlement run, which showed that that is supposed to be the settlement price for April,” Descanzo said.
He added if the ECQ is lifted, WESM charges will slowly go up.
“If the whole of May is still in ECQ, its possible the rates will be around P1.5 per kwh or slightly higher. On the other hand, if the ECQ is lifted on May 16, prices will go up and may reach P3.5 per kwh for 15 days and so the average price for the May could reach an average of P2. 47 similar to March,” the official said.
IEMOP earlier announced that prices that in the first half of April ranged from zero per kWh to P2.973 per kWh as the total demand in the Luzon and Visayas grids averaged just 9,541 MW while supply reached 13,911 MW (or over 4,300 MW supply margin).
Demand plunged significantly as the ECQ shut down commercial and industrial businesses while people were told to stay indoors to prevent the spread of COVID-19.
IEMOP also said a new trend in the demand profile was also observed in which spot prices were mostly higher during the night than in the afternoon.
IEMOP added the market rates might be affected by the restriction faced by coal plants.
Coal plants still dominate the supply capacity mix in the WESM. Around 600 MW of coal generation capacity will face supply restriction.
IEMOP said the restriction of supply from coal plants might be a result of logistical delays in the transportation and delivery of coal brought amid the ECQ.
“During such scenario, power plants utilizing available indigenous fuel (geothermal, hydro, and natural gas) will be maximized. The result of the simulations indicates that supply will continue to be sufficient. However, increase in market prices were observed,” IEMOP said.