By Carlos Korten
President, Green Tiger Markets
May 16, 2025
Every year for the past three years, the Philippines has recorded negative electricity prices on Good Friday—a day characterized by extremely low demand. This is not a coincidence.
These periods of low consumption expose fundamental structural issues between the growing supply of renewable energy and the inelastic nature of installed baseload generation.
On April 18, 2025, from 7:00 AM to 12:00 PM, spot prices in the WESM market dropped to negative ₱10,000 per MWh. For five hours of that day, the market paid consumers and distributors a massive premium to absorb excess electricity—an extreme but necessary measure to avoid grid failure. This is exactly what we track at Green Tiger Markets.
While rare, these events are increasing in frequency. In 2023, solar power made up just 4% of Luzon’s midday supply. Today, it accounts for 17%. And more capacity is being announced. Without structural changes, increases in renewable daytime power will make the episodic price disruption that we observe as an anomaly on Good Friday into an endemic and recurring problem. It could get worse.
Coal still remains more than 40% of the generation stack, and while it provides reliable and affordable energy—particularly during evening peak—it is an inelastic source of supply. Coal plants can never quickly ramp up or down. Forcing them offline during sunny, low-demand periods (like Good Friday) means they may not return in time to support evening demand. Coal plant operators respond by offering into the spot market at massively negative prices during daytime hours, simply to remain online.
The tension is structural: abundant solar power flooding the grid at low marginal cost under priority dispatch, while the underlying baseload supply still relies on coal. This cocktail results in periods of dangerous oversupply, market volatility, and a grid that is approaching its flexibility limits.
Roughly 23% of the nation’s power comes from elastic sources—natural gas, impounded hydro and, increasingly, battery storage.
These technologies can respond quickly to shifts in demand and supply, and are essential in stabilizing the grid. But elastic generation capacity simply isn’t growing fast enough to keep pace with solar.
At Green Tiger Markets, we forecast that midday prices will continue to decline, threatening the core economics of solar developers. More urgently, unless elastic generation capacity increases in proportion with the growth in renewables– and we do not believe enough is being done to bring this about– evening spot prices will rise sharply. Once the sun sets and all other flexible sources are exhausted, diesel-powered facilities will be called to deliver electricity as the fuel of last resort. This can only begin at a notional spot price of ₱12–₱13 per kWh. We’ve seen this happen again and again.
The looming risk is that the country’s success in sourcing abundant renewable power during the day may inadvertently increase its reliance on expensive and polluting generators at night—a public policy paradox. Replacing coal-fired generation with diesel has never been the plan.
Negative prices on Good Friday provide a glimpse into the underlying supply-and-demand dynamics of the power market, and a warning: The organic limits of grid flexibility are already being tested. Taking lessons from the recent grid failure in Spain and Portugal to heart, renewed attention should be paid to the problem of adding affordable resiliency at scale. “Elasticity of Supply” needs to become a new and urgent rallying cry, and a hallmark of the nation’s still-evolving energy strategy.
At Green Tiger Markets, we’re passionate about both tracking and usage. Reach out and let’s see how we can take the uncertainty out of your future energy planning.
This article was originally published on GreenTiger Markets.com.
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