WESM prices halved

Business World Online
Posted on September 18, 2011 07:13:08 PM


PRICES in the Wholesale Electricity Spot Market (WESM) fell by almost 50% in the seven months to July, due largely to operations of the Visayas segment, the Energy department said in a statement over the weekend.
Average spot prices from January to July year fell to P3.855 per megawatt-hour (MWh), a drop of 49.2% from the P7.595/MWh recorded the previous year.
“Lower spot price in WESM is attributed to the entry of WESM Visayas. Because of WESM Visayas, supply has stabilized, prices have come down and new investors are coming in,” the department explained in its statement.
Visayas WESM began commercial operations last Dec. 26.
“Both the Luzon and Visayas WESM are considered as one market, so there is increased competition between players to lower prices,” Melinda O. Ocampo, president of WESM operator Philippine Electricity Market Corp., said in a telephone interview over the weekend.
“There are also other factors like lower demand as well as sufficient supply that caused prices to fall,” Ms. Ocampo explained.
Under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, WESM was supposed to have started operating in the Visayas shortly after the start of commercial operations in Luzon in 2006. Supply concerns, however, led to delays. -- ENJD