Plant outages push up WESM prices

Manila-based climate and energy policy group Institute for Climate and Sustainable Cities (ICSC) said that prices at the electricity spot market had gone up after the Luzon grid was placed on red and yellow alart due to thinning reserves.

“While the June 18 transmission line tripping pushed the power system into the red alert level, the power system was already showing abnormal operation even weeks before, as indicated by the skyrocketing Wholesale Electricity Spot Market (WESM) generation costs,” said ICSC chief data scientist Jephraim Manansala.

Manansala said the Luzon power system had sufficient but expensive supply these past few weeks due to the frequent shutdown of several baseload power plants at overlapping periods.

The unplanned outages resulted in using multiple diesel power plants, which are significantly more expensive as influenced by the ongoing Ukraine invasion.

The high diesel plant utilization led to high WESM power costs, reaching an average of more than P10 per kilowatt-hour (kWh) daily and a peak price of more than P30 per kWh.

ICSC reiterated the need for flexible and distributed power generation to avoid such scenarios.

The group had previously predicted a shortfall in the country’s power supply in the second quarter, leading to red alert status and possible blackouts over the Luzon grid.

National Grid Corp. of the Philippines raised the yellow alert for Luzon for specific hours in the past three days starting Monday.

On Saturday, Meralco had to implement an automatic load dropping due to the tripping of Hermosa-Limay 230 kiloVolt (kV) transmission lines 1 and 2, which was restored around 3:00 PM the same day.