MANILA, Philippines — The entry of the new coal plants in the Visayas significantly pulled down prices at the Wholesale Electricity Spot Market (WESM) this year by P3.74 per kilowatt hour (kWh) as compared to record high prices in 2010.
Based on data released by spot market operator Philippine Electricity Market Corporation (PEMC), the average price for 2011 has been at P3.855 per kWh, posting a steep plunge from the previous year’s average of P7.595 per kWh.
“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,” Energy Secretary Rene D. Almendras has noted.
The spot market operator was prompted to release price outcomes at the WESM following a statement from group of renewable energy (RE) developers that they can be the ‘price stabilizers’ in the WESM.
What the energy department wanted to point out is that prices in the spot market can stabilize as long as sufficient and reliable supply can be assured – and so far, that level of stability was provided by the entry of new coal plants in the Visayas.
The WESM-issued figures somehow negated the argument of RE developers that they can bring down spot market prices by P3.00 per kWh with the entry of their new capacities; because even without yet the RE generation capacities, WESM prices have already gone down by more than P3.00 per kWh.
In fact, under the scenario of P3.855 per kWh average prices, industry players claimed that the average calculated feed-in-tariff rate of RE at P7.87 per kWh will actually trigger higher prices for the consumers. Based on NREB’s computation, the price average for RE technologies will also be going up in the next 20 years.
While the study of the technical working group of the National Renewable Energy Board (NREB) latched on the “must-run dispatch” of RE technologies, it has been noted that their assumptions hinged on ‘inequitable parameters” because the designated ‘must-run’ capacity being compared with during the tight supply months of 2010 had been the relatively-expensive diesel plants.
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By: Myrna M. Velasco
Source: Manila Bulletin, Sept. 19, 2011
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