The Independent Electricity Market Operator of the Philippines said Wednesday the average electricity prices in the Wholesale Electricity Spot Market began to go down in June on more stable supply and demand.
"For the first 20 days of June 2021, a decreased demand and a slight improvement in supply was observed which reflected a decrease in the resulting market prices with an average of P 6.53 per kilowatt-hour," IEMOP, operator of the WESM, the trading floor of electricity, said in a statement.
IEMOP data showed that average electricity from June 6 to June 12 was P3.84 per kWh, down from P7.88 per kWh in the week of May 30 to June 5.
It said that from June 13 to June 20, average electricity prices went up to P6.08 per kWh but still lower than P9.55 per kWh from May 23 to May 29 and P8.56 per kWh from May 16 to May 22.
"We know that the month of June is the start of the rainy season. That's why demand is decreasing. From 11, 500 megawatts from May 23 to May 29, it went down to 11,200 at the start of June and then it decreased to 10,600, then went up again to 10,900," John Paul Grayda, IEMOP manager for pricing validation and analysis, said in a virtual briefing.
IEMOP officials said the lower WESM average prices in the early weeks of June were also due to the imposition of the secondary price cap, a price-mitigating mechanism imposed when there are persistent high market prices.
This resulted in an effective settlement spot price of P8.31 per kWh in May, or double the P4.04 per kWh observed in April.
The Department of Energy said the secondary price cap allows the market operator to limit the prices in the market at P6.245 per kWh as a protection for consumers.
IEMOP is a non-stock, non-profit corporation governed by a professional board of directors composed of individuals not affiliated with any of the electric companies that trade in the WESM. IEMOP carries out the mandate to pursue the WESM objective to have a transparent, fair, competitive and reliable market for the trading of electricity throughout the Philippines.