A study by Aurora Energy Research forecasts lower electricity spot market prices starting this year until 2030 with the entry of more power plants and the shift to renewable energy.
This forecast is part of Aurora’s presentation to the Energy Regulatory Commission (ERC) in a recent forum.
“Aurora also forecasts that, between 2024 and 2030, WESM prices are expected to slightly come down given the new capacity entry while the exposure to international gas prices will drive the upward trend in the prices,” the ERC said.
“As the Philippines shifts to a renewable- intensive system, Aurora likewise predicts that midday electricity prices will decrease, driven by high volumes of cheaply-offered solar energy in the Philippines,” it said.
The ERC gathered energy policy experts, government agencies, distribution utilities, consumer groups and private power associations in a forum to provide regulatory updates and insights on the current frameworks on power supply agreements (PSAs) and the conduct of competitive selection process (CSP) or bidding.
The forum, organized in collaboration with Aurora, TransitionZero and ClientEarth, presented the study entitled “Insights into Philippine Power Supply Agreements” and the preliminary study of TransitionZero analyzing the CSP, which identified gaps and opportunities for improving the process.
A draft of the toolkit for the CSP being developed by ERC with the assistance of ClientEarth was also presented.
The ERC cited the analysis of Aurora that the Philippines is projected to undergo a significant transformation towards renewable energy dominance by 2050, with over 60 percent of its electricity sourced from renewables.
Solar energy is slated to be the main technology driving the transition from 2024 to 2030 as it is the focus of Green Energy Auction Program (GEAP) auctions.
An increase in onshore and offshore wind capacity is also expected in the country, reaching about 54 gigawatts by 2060.
The ERC said TransitionZero studied the PSAs of two private distribution utilities (DUs) and two electric cooperatives (ECs) to evaluate the efficacy of the previous CSP policy prior to its revision in 2023.
The assessment found that PSAs signed through CSP significantly reduced non-performance issues compared to those signed without a CSP that resulted in various outcomes particularly in terms of generation, price stability, affordability, reliability and procedural efficiency.
TransitionZero’s study also found that “least cost” principles justifications varied across PSAs, complicating comparisons and risk evaluations.
