Published
By MYRNA M. VELASCO
In this year’s summer
months, Filipino consumers are being warned this early that they will be
assaulted anew with double whammy of electricity price spikes and power supply
tightness that may be coupled with worst case scenario of rolling brownouts.
On a written report
that the operator of the Wholesale Electricity Spot Market (WESM) had submitted
to the Department of Energy (DOE) and the Senate committee on energy, it was
stipulated that “with the expected increase in demand, tight supply conditions
and price spikes are likely to happen particularly during summer period,” or
from March to June this year.
Independent Electricity
Market Operator of the Philippines (IEMOP) noted that last year, consumers had
to bear the brunt of more than 50 percent hike in prices of spot
market-procured electricity because of tight supply conditions.
“The average price in
2019 was higher by 57 percent compared to the average prices of the previous three
years. This can be attributed to the thinning of supply margins as available
generation capacities are now unable to adequately support the increasing
demand given the heightened occurrence of forced and maintenance outages and
insufficient development of new generation capacities,” the WESM operator has
emphasized.
The unfortunate
scenario in the country’s power system now, it added, “underscores the need for
new generation capacities to meet increasing demand.”
With sufficient power
supply or ample flow of investments in additional power capacity, it stressed
that such could “prevent recurrence of high market clearing prices,” which in
the process redounds to higher pass-on costs in the consumers’ electric bills.
The same IEMOP report was presented to the industry stakeholders on Thursday
(January 23) – including with the power generation companies (GenCos) of which
dilemmas of plants’ forced outages emerged as a major stress in the electricity
system last year.
According to Isidro E.
Cacho Jr., chief of IEMOP’s Corporate Strategy and Communications Officer, the
demand increase projection for this year is at 690 megawatts, hitting a high of
14,191 megawatts by June this year.
As assessed, while
demand is increasing, supply addition is being beefed up way slower than it
should have been, hence, the power system is already on a very rigid catch-up
mode.
Compounding the
situation, Cacho expounded, are the forced outages of the power plants that are
happening both in the array of older and newer fleets of electricity generating
assets.
“Demand is definitely
increasing; and we are increasing at the rate of 500 to 600MW; or at 5.0 and
higher annually. But the thing is we lack new development of supplies of
generating capacity,” he said.
IEMOP further indicated
that this year’s demand uptick “follows trends in previous years, such as in
2019, when demand level increased by 4.0 percent compared to previous years.”
The power system can
expect the entry this year of new power capacity from the 668MW Dinginin
coal-fired power plant, but this is scheduled on stream by July which would
already be beyond the summer months.
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