By John Knorring
CEO, Green Tiger Markets

The volatile rhythms of solar and hydro are reordering the price clock of the power market

In the Philippines, the sun now plays a bigger role in setting electricity prices than the president does. What was once a relatively predictable intraday pricing pattern—mild in the morning, peaking by mid-afternoon, and tapering into the night—has begun to warp under the growing weight of renewable energy. Solar in particular, with its abundant but erratic midday generation, has upended the traditional cadence of supply and demand. The result? A midday glut, creeping evening peaks, and a market struggling to keep tempo.

Over the past decade, the country has ramped up its renewable capacity. Solar installations have grown from virtually zero to over 2,000 megawatts today. Hydropower, long a quiet backbone of supply and stability, has seen limited growth. Yet this green march brings not just lower emissions—it brings instability. The Philippines’ grid, designed for slow, steady fossil generation, is finding it difficult to dance to the stochastic beat of sunshine and rainfall.

The “Dove” Curve

The most visible sign of change is in the shape of the “intraday price curve”. In the pre-renewables era, prices rose steadily through the morning, peaking around 2–5pm as demand from offices, malls, and factories surged. Now, thanks to solar, prices often crash around noon. So much electricity is generated between 11am and 2pm that spot market prices can fall to near-zero, and occasionally negative, levels. 

Between 6pm and 9pm, when solar has vanished but demand remains high—air-conditioners hum, TVs flicker on, rice cookers buzz—the grid leans heavily on ageing coal plants and diesel peakers. The curve and, therefore, prices shoot up sharply—creating a late-day “neck” reminiscent of the infamous California “duck curve”.

In the Philippines, the tangent of the intra-day curve as the evening arrives is not yet as extreme as the typical duck curve we can observe in other solar-heavy power markets. The Philippines has a lower midday belly than prior years, followed by a gradually increasing evening crest. It’s closer to a dove than a duck. As more solar power comes online, this dove is unlikely to herald news of a peaceful safe harbour. 

This volatility is worsened by the country’s weather whims. Hydro plants, while technically dispatchable, are hostage to erratic rainfall. And unlike temperate zones where solar follows a more stable seasonal arc, Philippine solar is plagued by tropical downpours and cloud cover. That means intraday prices can swing wildly even within a week. One day, solar floods the market; the next, the system reverts to fossil-heavy dispatch.

A Market Without a Middle

Perhaps the most destabilising force is not the renewables themselves—but the lack of flexible generation to accompany them. The Philippine energy market is curiously hollowed out in the middle. There are peakers and baseload plants, but few nimble assets capable of ramping up and down quickly. Gas, the ideal balancer, remains elusive—LNG imports are only just beginning. Batteries, still prohibitively expensive, are mostly confined to pilot projects or island grids.

This creates a perilous situation for the Wholesale Electricity Spot Market (WESM). Prices whipsaw not only intraday but also intranodal: different grid points can experience vastly different marginal prices depending on local generation and congestion. For traders and distribution utilities, forecasting becomes a game of probabilistic weather modeling as much as load planning.

Let There Be (Smarter) Light

In our next article, we will explore ways in which the energy markets might seek to address these challenges. For now, Filipino consumers are riding a rollercoaster of volatility—daylight discounts followed by twilight penalties. The age of renewables is here. But without nimble grid architecture, more sophisticated storage solutions and a broader adoption of financial hedging products, the country risks turning a clean energy revolution into a chaotic price experiment.

About the Author

John Knorring is the founder and CEO of Green Tiger Markets, the first and only provider of a forward marketplace for the Philippines energy industry. He has over 25 years experience in forward hedging markets. He is a believer in the power of markets and a proponent of transparency and price discovery. John, a Chicago native, is a resident of Austin, Texas.