Electricity spot market prices dived into a five-year low in December, keeping the annual average lower in the last three years, data from the Philippine Electricity Market Corp. (PEMC) said.
PEMC said effective settlement spot prices (ESSPs) in the Wholesale electricity spot market (WESM) dropped to P2.28 per kilowatt-hour (kWh) in the December 2016 billing period, the lowest since 2011.
“The drivers were low demand due to cold weather and more available capacity from generating companies,” PEMC president Melinda Ocampo said.
ESSPs are the average prices paid by the wholesale customers for power purchased from the spot market.
Distribution utilities and customers sourced an average of 21 percent of their requirements from WESM.
In 2016, ESSps averaged at P3.32 kWh, declining for the past three years. Spot prices averaged P4.46 per kWh in 2015, P5.58 per kWh in 2014, and P8.37 per kWh in 2013.
Ocampo said that the downtrend of market prices are due to commercial forces.
“These market prices send signals to investors to make sound investment decisions on the timing of installation, capacity and type of resources. We see that WESM plays a pivotal role in a liberalized and deregulated market environment,” she said.
The Manila Electric Co. (Meralco) sourced 21.96 percent of its supply from the WESM benefiting from the low prices.
Meanwhile, for the month, coal accounted for 45.5 percent of the power generated in the Luzon and Visayas grids. Natural gas has 25.5 percent and diesel/oil with 0.5 percent, market data showed.
Renewables made up 28.5 percent of the generation mix. 13.9 percent came from geothermal power, 2.8 percent for wind power, 1.4% from solar, 9.5% from hydropower, and 0.9 percent for biomass.