Independent Electricity Market Operator of the Philippines (IEMOP) expects the Luzon and Mindanao grids to have adequate supply in 2026, if current operating conditions hold, but cautions that the Visayas grid will remain the most vulnerable to tight reserves. Head of Trading Operations Isidro Cacho Jr. said the region has become “heavily dependent” on imports from Luzon and Mindanao, which exposes it to immediate impacts whenever large plants in those grids go on forced outage.

Cacho noted that next year’s demand is expected to grow in line with normal economic activity, with DOE projections pointing to around 5% growth. For Luzon, he said peak demand could rise from roughly 14,000 MW last year to about 14,600 MW. Similar trends are expected for Visayas and Mindanao.

Spot market prices in 2025 have generally hovered between PHP 3 and PHP 5 per kilowatt-hour based on system-wide settlement data from October 2024 to November 2025, with occasional spikes during months when supply tightens. Cacho said the current environment aligns with what the market has been seeing this year, adding that weather conditions and the timing of outages remain factors to watch.

IEMOP’s projections for 2026 place Luzon’s spot prices at around PHP 5/kWh under normal conditions. In the Visayas, where reserves are thinner and reserve technologies rely more heavily on batteries and diesel, prices could climb from the current PHP 5/kWh level to PHP 6–PHP 7/kWh if forced outages occur. 

“If we encounter what happened last year… we will see not just in Visayas, but I think even in Luzon,” Cacho said, referring to periods when several thousand megawatts of capacity simultaneously went offline.

He also highlighted changes in price behavior, noting that market spikes now occur around 6 to 7 p.m. when solar output drops, a shift from earlier years when volatility occurred in the early morning. The entry of additional renewable energy projects next year may help moderate prices, but Cacho said some projects remain in testing and commissioning and their commercial timelines “might be delayed.”

Cacho added that the market remains sensitive to unplanned outages despite improvements in generator performance this year. “Our prayer is that there should be no force outages, especially during those periods,” he said, particularly for the first and third quarters when planned maintenance schedules cluster.

System-wide data from October 2024 to November 2025 shows that spot quantities accounted for roughly 12% to 23% of monthly metered energy, while ESSP values fluctuated month-to-month, reflecting the conditions described by IEMOP. 

These variations support Cacho’s view that the market remains robust but subject to short-term volatility driven by supply disruptions, seasonal conditions, and technology mix.

How can the power sector strengthen system reliability ahead of the expected demand growth in 2026?

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