Luzon facing tight power supply in dry months

The Luzon grid will face tight power supply and possible high rates in the spot market during the dry months similar to what happened last year, according to an official from Independent Electricity Market Operator of the Philippines.

“The price profile of 2019 will likely be the same as 2020. There will be price spikes,” Robinson Descanzo, IEMOP chief operating officer, said during a briefing Thursday.

IEMOP operates the Wholesale Electricity Spot Market, the country’s trading floor of electricity. It is a centralized venue for buyers and sellers that trade electricity as a commodity where prices are based on actual use (demand) and availability (supply).

WESM started operations in Luzon in 2006 and Visayas in 2010. Preparations are underway to set up WESM in Mindanao.

“It will not go up beyond P9 because of the cap. That’s the highest we are expecting... because we have projected a growth of 5.6 equivalent to around 700 MW and then we don’t have additional power plants that will come in before summer, it will come in after summer,” the official said.

Descanzo cited a need to ensure power plants do not go on simultaneous outages amid  the anticipated increase in demand in Luzon and Visayas by an average of 5.6 percent this year.

According to IEMOP, the anticipated increase in demand followed trends in previous years such as in 2019 when demand rose by 4 percent.

Demand in Luzon is forecast to increase 4.9 percent and Visayas by 6.9 percent in 2020. The 2020 data projection uses the 2016-2040 Department of Energy Power Development Plan Demand Growth Rate paper.

Peak demand in Luzon and Visayas is expected to reach 14,191 MW this year compared with 13.450 MW in 2019 and usually occur during the dry months when temperatures are high.

Topics: Luzon grid , power supply , Independent Electricity Market Operator of the Philippines , IEMOP
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