WESM prices fall to P2.27/kWh, a 5-yr low


    THE Philippine Electricity Market Corporation (PEMC) on Monday said the effective settlement spot prices (ESSP) on the wholesale electricity spot market (WESM) hit a five-year low of P2.27 per kilowatt-hour (kWh) for the November 2016 billing period.

    PEMC is the operator of WESM, the trading floor for buying and selling electricity.

    “2016 has a downward trend, driven by higher energy volume offers in the market and colder temperatures, plus it has lower demand this time as there are now many renewable energy sources,” PEMC President Melinda L. Ocampo told reporters on Monday.

    “Such a sharp decline in market prices is welcome as long as wholesale customers, like distribution utilities, pass on the historically low market prices to their end-users,” Ocampo said.

    ESSP is the average price paid by wholesale customers in the spot market. This month’s ESSP is the lowest since January 2011.

    During the November 2016 billing month, wholesale customers sourced 19 percent of their power supply requirements in the spot market, a near eight-year high since March 2009.

    The PEMC noted that in November and December 2013, one of the worst power shortages or red alerts in the country happened, and again in July and August 2016.

    The difference is that now, Ocampo said, there are many mitigating measures in place to lessen the impact of power shortages after the November and December 2013.

    This time, and based on their experiences, they have adopted already, Ocampo said. “It’s a lesson learned.”
    As of November, the generation mix consisted of 47.42 percent coal and 26.25 percent renewable energy, and
    the rest is accounted for by petroleum fuel-fed power plants.

    “The recent developments in the electricity market underpin PEMC’s efforts in establishing a competitive, efficient, transparent and reliable market, where prices are governed as practicable by commercial and market forces,” Ocampo said.

    The trend is expected to continue in 2017, as supply overwhelms demand – particularly in January and February when the demand starts to fall.

    Ocampo said 2017 will also see PEMC’s involvement in the full implementation of retail competition and the establishment of WESM in Mindanao.

    The Department of Energy (DOE) has targeted June 26, 2017 for integrating Mindanao to the spot market in coordination with the Mindanao system operator.


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    1 Comment

    1. How can WESM sell green energy sources at a feed-in-tariff of about 6 pesos to 10 pesos per kwhr to 2.27 pesos per kwhr.

      How can solar and wind sources be dispatched to provide specific power demand?

      If energy cost 2.27 pesos per kwh, why is the consumer is billed an effective rate of more than 10 pesos per kwhr – by a highly “imaginative accounting?”. Cost of energy is 2.27 while 12.00 pesos is the real effective cost paid by consumer?, so about 8.00 pesos per kwh is added to the real cost of 2.27 pesos?Is 8.00 pesos is lost to “system losses” or are the cartels thru the PEMC are making “tubong lugaw” in uncontrolled greedy take; at the expense of the consumers, and to the detriment to the economy?

      What is the energy regulator and the government going? Just accept the ” system losses and forex” excuse in the billing statement that jacks up the energy cost to 600% because they are too stupid to think, just plain corrupt, or all of the above?

      The abusive energy cartels, shady chinese “green energy operators” and corrupt energy regulators should be the first to be subjected to death penalty – firing squad or hanging for the continuing trillions in plunder and economic sabotage.

      But congress and senate don’t care to investigate this ultimate perpetual plunder – why?