Rainy season spurs lower energy demand and reduced WESM rates in the Philippines

Lower demand and increased power supply reserves exerted downward pressure on Wholesale Electricity Spot Market (WESM) prices during the first two weeks of September, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

In a statement, the IEMOP highlighted that the dip in WESM prices was primarily due to “ample supply margins and subdued demand when compared to the preceding summer months.”

For Luzon, the average power demand tapered from 9,480 MW to 9,119 MW, resulting in a decline in spot market rates from P5.53 per kilowatt-hour (kWh) in August to P4.12 per kWh in September.

Visayas also experienced a reduction in average power demand, decreasing from 1,872 MW to 1,850 MW during the corresponding billing periods. Consequently, the average WESM price in Visayas witnessed a reduction of P0.25 per kWh, dropping from P6.18 per kWh to P5.93 per kWh.

In Mindanao, a reduction in the average supply margin by 358 MW, attributed to the deration and outage of certain generators, led to a price uptick from P4.82 per kWh in August to P5.81 per kWh in September.

IEMOP attributed the lower demand to the ongoing rainy season, which has bolstered supply adequacy across all three major grids in the country.