Wholesale Electricity Spot Market (WESM) prices rose by 38.5% in May as higher summer demand, tighter supply margins, and power plant outages pushed electricity prices upward across all major grids, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

In its May 2026 market report released on June 10, IEMOP said the system-wide average market price increased to PHP 7.79 per kilowatt-hour (kWh) from PHP 5.63/kWh in April.

The increase came as electricity demand grew faster than available supply. Average demand rose by 9.4% month-on-month to 15,755 megawatts (MW), while average supply increased by only 2.7% to 21,374 MW. As a result, the system-wide supply margin narrowed to 3,629 MW from 4,427 MW in the previous month.

A supply margin refers to the amount of available generation capacity above actual demand. Lower margins generally indicate tighter market conditions and can contribute to higher electricity prices.

Demand across all three major grids reached year-to-date peaks during the month. Luzon recorded an average demand of 14,359 MW, while Visayas and Mindanao posted average demand levels of 2,770 MW and 2,808 MW, respectively.

“Electricity prices in the market increased as demand for power rose during the summer season while some power plants were unavailable due to maintenance activities and unexpected outages,” said IEMOP Vice President for Trading Operations Isidro E. Cacho Jr.

Power plant outages also contributed to the tighter market conditions. Luzon recorded 5,931.4 MW of forced outages across various technologies, primarily hydro and natural gas facilities. In the Visayas, forced outages reached 782.7 MW, largely from coal and geothermal plants, while Mindanao recorded 560 MW of forced outages.

The resulting supply constraints contributed to grid alerts in Luzon and Visayas and pushed prices higher across all regions.

Visayas recorded the highest average market price at PHP 10.20/kWh, up from PHP 5.63/kWh in April. Mindanao followed at PHP 9.28/kWh, while Luzon posted an average market price of PHP 7.02/kWh.

Transmission constraints further tightened supply conditions during the month. According to IEMOP, both the Leyte-Luzon and Mindanao-Visayas high-voltage direct current (HVDC) interconnections frequently operated at maximum or security-limited transfer levels, limiting the movement of electricity between regions.

Congestion along the Leyte-Cebu transmission corridor also restricted internal power transfers and contributed to localized price separation, particularly in Leyte.

Market activity increased alongside higher prices. Spot market volume accounted for 17% of total traded electricity in May, up from 16.3% in April, while total trading value rose to PHP 29.55 billion from PHP 19.47 billion.

Coal remained the country’s dominant power source, accounting for 58.6% of total generation during the month. Natural gas contributed 17%, while renewable energy sources collectively supplied 21% of total generation.

IEMOP also noted a significant increase in oil-based generation, which rose from 0.2% to 1.7% of the generation mix as oil-fired plants were utilized to help meet peak demand and compensate for unexpected outages.

The market operator said May’s trading results reflected the combined impact of higher electricity consumption, generation outages, transmission constraints, and tighter reserve margins across the country’s power system.

As electricity demand continues to rise during periods of extreme heat, how can the power sector better ensure adequate generation and transmission capacity to help stabilize market prices?

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