Power rates stabilize due to entry of Wesm Visayas

BUSINESS MIRROR
SUNDAY, 18 SEPTEMBER 2011 19:26


THE Department of Energy (DOE) said that power rates at the Wholesale Electricity Spot Market (WESM) have gone down this year.


From January to July this year, Energy Secretary Jose Rene Almendras said the spot price of electricity from the WESM has gone down by an average of P3.855 per kilowatt-hour (kWh) this year from P7.595/kWh in the same period last year.


Almendras said the entry of WESM Visayas has lowered spot prices in the WESM.


“Because of WESM Visayas, supply has stabilized and prices have come down,” Almendras said.


He added that new investors in the power sector are coming in because of the entry of WESM Visayas.


Similar to the WESM Visayas, Almendras earlier said the DOE is also mulling the setting up of a WESM in Mindanao in a bid to address the power situation in Mindanao.


“We’re trying to look for a way to dispatch ancillary power in Mindanao in a fair-pricing mechanism. Everything is still way up in the air as to how exactly we’re going to do it,” the energy chief said.


Almendras said that what they have in mind is a mechanism that would fix prices unlike in the WESM where the price is determined by supply and demand.


He said that Mindanao whose existing diesel plants are rehabilitated are the most ideal facilities for ancillary service.


Before they could set up a hybrid power market, Almendras said they will have to wait until the ancillary production levels will improve.


He said that as long as there is rain there is enough power supply in Mindanao. Supply there becomes critical only during an El Niño phenomenon season.


“Nevertheless, we don’t think we can implement WESM in its full form in Mindanao. So we’re trying to pick what is needed to establish a semi-dynamic spot market in Mindanao. It can be supply bidding or nomination format; we’re studying all sorts,” Almendras said. --Paul Anthony A. Isla