Industrial load to trigger power demand hikes in coming months
Monday, September 04, 2006
Price signals at the Wholesale Electricity Spot Market (WESM) are seen trailing up-ticks in the coming months with anticipated tightness of supply due to higher demand for industrial loads.
"Increasing demand over the next few months will be driven by industrial loads as manufacturing increases prior to the holiday season. This should, in turn, cause WESM prices to increase until then," noted Philippine Electricity Market Corporation president Lasse A. Holopainen.
But he has also emphasized that electricity prices at the sport market will eventually drop back again in the first quarter of next year before peaking again during the summer months.
In WESM’s second month of commercial operations covering July 26 to August 25, the registered load weighted average price (LWAP) was higher by R0.10 per kilowatt hour to R2.89 from the last billing month’s R2.788 per kWh.
This was primarily traced to the forced outage of some power plants, chiefly the 1,200 megawatt Sual coal-fired plant which is designed as a baseload facility for the Luzon grid.
"The increase was due to lower supply brought about by the outages of plants undergoing maintenance and slightly increased demand as rainfall decrease during this period," PEMC vice president for WESM operations Mario Pangilinan has explained.
Holopainen noted, on the other hand, that the "relatively low" price in the first month of operations are highly attributed to the high availability of cheaper power from hydroelectric plants because of heavy rains visiting the country and resulting to cooler temperatures which gives leeway to households to put off their air-conditioning units.
Reaching this stage, PEMC acknowledged that it remains upbeat of WESM’s potential given that "there were no significant breaches of the WESM trading rules and no incidents of overt or implied price manipulation was evident or was reported."
The PEMC chief executive stressed though that "we still need to improve the coordination between the plant operators and the trading participants in many respects." (MMV)
Pangilinan bared that it has been holding monthly update meetings among the power generators, distribution utilities and other market participants "to clarify the operational issues with them and discuss how these may be resolved."
In the Visayas, PEMC is currently entrenched in sorting out all preparations in bid to finally put into commercial operations the electricity spot market in the area, as targeted by first quarter next year.
The company said it is currently setting up the local office in the region as its way of gradually establishing its presence in the Visayas domain.
"However, we continue to assess as to WESM operations in the Visayas given the local supply situation are viable and will make a recommendation to the DoE at the appropriate time," PEMC has noted.(MMV)
posted by philpower @ 7:49 AM,
