Summer power supply seen steadier

The coming summer may bring relief rather than rolling alerts, with Luzon’s power supply improving after regulators extended key gas contracts and new plants moved closer to operations. 

“Our outlook for the summer supply is also good news, particularly dito sa Luzon,” IEMOP vice-president for trading operations Isidro Cacho Jr. said at a media briefing on Wednesday, citing the Energy Regulatory Commission’s extension of contracts between gas plants and Manila Electric Co., which he said has reduced uncertainty in gas plant dispatch.

Cacho said demand typically spikes during summer, and authorities are hoping to avoid a repeat of 2024, when extreme heat triggered frequent yellow and red alerts. 

Additionally, he said the new generating capacity, including large renewable energy projects in Nueva Ecija, is expected to further strengthen supply in Luzon, with additional plants also coming online in the Visayas and Mindanao.

This improving supply outlook was reflected in lower Wholesale Electricity Spot Market prices across all grids in January, as demand eased while supply remained ample.

The system-wide average spot price fell to P3.56 per kilowatt-hour (/kWh), down from P4.38/kWh in December and P3.98/kWh in November. This came as average demand slipped 7.1 percent month on month to 12,492 megawatts, while supply eased more moderately to 19,152 megawatts (MW).

In Luzon, the average price rose slightly to P3.25/kWh from P2.98/kWh in December but remained below November’s P3.52/kWh, even as average demand declined 8.3 percent to 8,574 MW.

Visayas saw a sharper drop in prices, with the average falling to P4.24/kWh from P7.22/kWh in December, as demand eased to 1,861 MW from 1,978 MW a month earlier.

Mindanao prices also declined, averaging P4.27/kWh, down from P7.82/kWh in December, alongside a reduction in demand to 2,056 MW.

Load-weighted average prices echoed the trend. System-wide prices eased to about P4.22 to P4.49/kWh in January from P4.01 to P4.42/kWh in December. Luzon averaged P3.25/kWh, Visayas P4.24/kWh, and Mindanao P4.27/kWh.

IEMOP said ample reserve margins and lower peak demand helped keep prices in check, despite intermittent price separation across grids during the billing period.