Coal delivery problems may drive power rate hike


The Wholesale Spot Market (WESM) warned that due to “restriction of supply” from coal plants, electricity prices in the spot market might increase in the coming days and weeks.

The Independent Electricity Market Operator of the Philippines (IEMOP) had also noted that there was obstructions in the delivery of coal to power plants due to the coronavirus disease 2019 (COVID-19) pandemic as some key areas in the country are in the extended enhanced community quarantine (ECQ).

Industry players also indicated that the country’s major source of coal imports like Indonesia were also affected by the pandemic.

“With coal plants dominating the supply capacity mix in WESM, supply scenarios considering the restriction of coal generation by about 600 megawatts were simulated,” the spot market operator was quoted in a report.

“The restriction of supply from coal plants may be a result of logistical delays in the transportation and delivery delays of coal brought about by the ECQ,” IEMOP added.

Power plants utilizing geothermal, hydro, and natural gas sources will be maximized, WESM explained.

“The result of the simulations indicates that supply will continue to be sufficient, however, increase in market prices were observed,” WESM noted.

Spot market prices might rise up to ₱6.68 per kilowatt-hour (kWh) when the ECQ is already lifted within May, which will be a significant increase from what was logged as average ₱2.47 per kWh settlement price in March.