Electricity spot market prices on the rise

Average electricity spot market prices have been rising in the last three months leading to October on the back of declining supply, according to the Independent Electricity Market Operator of the Philippines (Iemop).

The Wholesale Electricity Spot Market (WESM) price as of Oct. 16 averaged P9.31 per kilowatt hour (kWh), based on the figures provided by Iemop, subject to further validation and correction.

This was higher than the average WESM price of P9.12 per kWh for the September billing period and P7.26 per kWh for the August billing period.

WESM, operated by the Iemop, is the central venue for trading electricity as a commodity.

This is where generators sell their excess capacities not covered by contracts and distributors purchase additional capacities to supplement their primary supply.

The generation charge, or the cost of purchasing power from suppliers, accounts for more than half of the total monthly electric bill paid by consumers.

Suppliers include independent power producers, power producers with power supply agreements, power producers using renewable energy and WESM.

Any upward or downward adjustment in the WESM price will reflect in the customers’ monthly bills.

“In August, we have recorded low prices and the price spikes are not that prevalent,” said Iemop corporate communications manager Josell Co during a virtual briefing.

“But then in the September billing period, we have noticed the prices in the spot market have increased,” he told reporters.