IEMOP sees price spike risk in 2026

Electricity prices across the grid may climb next year as growing demand and potential supply disruptions tighten operating conditions, according to the Independent Electricity Market Operator of the Philippines (IEMOP). 

Speaking to reporters on Thursday, IEMOP vice-president for trading operations Isidro Cacho Jr. said the outlook assumes the current supply situation continues. 

“Considering current conditions — meaning the supply level we’re seeing now and if the same supply level happens by next year — we see that in Luzon and Mindanao, we won’t have issues,” he said. “But when it comes to the Visayas, we are seeing issues because primarily, it has now become dependent on Luzon and Mindanao.”

Cacho said the Visayas is more vulnerable because it relies on power imports.

“Visayas is a net importer of power from Luzon and Mindanao, so when interconnections from Mindanao and Luzon are limited, the expensive plants set the price in the Visayas,” he said. 

Based on IEMOP’s initial forecast, Luzon prices may average P5 to P6 per kilowatt-hour (kWh), Mindanao P4 to P5 per kWh, and the Visayas around P6 per kWh. These already account for planned maintenance, but Cacho warned that “when there are additional unplanned outages, prices could rise even further.”

Meanwhile, demand is expected to grow by about five percent next year, with Luzon peak demand possibly rising from 14,000 megawatts (MW) to roughly 14,600 MW. 

Cacho also pointed out that while generator performance has improved, the system is still sensitive to disruptions.

“If we encounter what happened last year, when forced outages reached around 2,000 to 3,000 MW, we will see impacts not just in the Visayas but also in Luzon and Mindanao,” he said.

The Department of Energy prohibits plant maintenance during the second-quarter summer period, which concentrates scheduled outages in other months.

“When forced outages occur during months with heavy plant maintenance, supply to the grid gets aggravated,” Cacho said. “When we assume forced outages, there will really be a price spike.”

Although forced outages have decreased this year, Cacho said the combination of rising demand and the Visayas’ dependence on imports means next year’s prices could still climb if supply interruptions occur.

The Visayas grid was briefly placed on yellow alert on Thursday as forced outages, derated plants, and rising demand pushed available capacity to 2,578 MW, close to peak demand of 2,535 MW, with limited support from Mindanao further tightening supply. 

NGCP lifted the alert by early afternoon after capacity increased to 2,760 MW and demand dropped to 2,421 MW.