THE December settlement for electricity spot prices plunged to P2.28 per kilowatt-hour (kWh), the lowest since January 2011, the Philippine Electricity Market Corporation (PEMC), said Tuesday.
The settlement spot price is the average price paid by wholesale customers on the Wholesale Electricity Spot Market (WESM), the trading floor for electricity operated by PEMC.
“Prices in the market are result of commercial forces. These market prices send signals to investors to make sound investment decisions on the timing of installation, capacity and type of resources. We see that WESM plays a pivotal role in a liberalized and deregulated market environment,” PEMC President Melinda L. Ocampo said.
Distribution utilities and customers directly withdrawing from the grid sourced 21 percent of their requirements from the spot market. The Manila Electric Co., the largest distribution utility in the country, bought 21.96 percent of its supply from WESM and benefitted from lower spot prices.
For the December 2016 billing period, 45.5 percent of the electricity generated in the Luzon and Visayas grids came from coal-fired power plants. There was a slight increase from the output of geothermal producers at 13.9 percent and wind farms at 2.8 percent.
“As we reap the benefits of a working WESM, we are preparing for the full implementation of retail competition where hopefully the efficiencies in electricity trading will redound to the benefit of contestable customers,” Ocampo said.