This Chart is a reminder that we’ve seen higher monthly average WESM prices before.
I’ve plotted the Monthly Average WESM price here on the blue line (placing it at the 15th of each month) and superimposed some daily average prices in the background.
But I’m focused on the monthly average, which for May was P6.8/kWh. That’s high for 2011/12 but in 2010 we saw monthly prices average P10.5/kWh and even P13/kWh.
When looking at monthly averages, it’s not a game of trends so much as it is a game of possibilities. You can look at the chart and see that for the next few months we have a very wide range of possibilities. We know from history that prices exceeding P10 on a sustained monthly basis are perfectly feasible.
2010 was a time of much different coal prices than we have now. Much different. But high WESM prices are not driven by coal prices. - it’s driven by oil utilization. Which in turn is a result of a tightening in the demand/supply situation (which is hardly price related at all).
By the way, we’re more than half way through June and prices so far this month are averaging about P8.3/kWh.
These are updated through June 10.
On the top chart, I’ve added the 200 day moving average so you can tell when daily prices move above or below the long-term average. You can also see the daily average price spike on June 8/9 when we had the weekend problems with Sual and Ilijan and prices spiked to the P55-60/kWh range for a few hours.
The bottom left chart shows that this time last year prices were already headed down from their typical May highs - but not so far this year.
The bottom right chart shows that demand, as typical this time of year, is starting to head back down to its trend line after the May highs. We’ll have to see how that goes.
Released today. Addressing the year 2011. Lots of data available.
“Global energy consumption grew by 2.5% in 2011, broadly in line with the historical average but well below the 5.1% seen in 2010. Emerging economies accounted for all of the net growth, with OECD demand falling for the third time in the last four years, led by a sharp decline in Japan.”
“The averages hide a mixed picture by fuel, however. Oil demand grew by less than 1% - the slowest rate amongst fossil fuels - while gas grew by 2.2%, and coal was the only fossil fuel with above average annual consumption growth at 5.4% globally, and 8.4% in the emerging economies.”
How Much Energy is Meralco Taking From the Spot?
It has steadily trended down to about 5% now.
Monthly Power Supply Cost Updates for May
The May WESM Settlements Price is my estimate - the actual hasn’t been released by WESM yet.
Saturday Update on Generation Status
The table shows Friday and Saturday back-to-back. Hourly delivery is shown as a percent of unit’s rated output.
You can see we lost Sual 1 right after midnight Friday. It came back on-line at 4pm Saturday and began ramping back up to full load over the next four hours.
You can see Ilijan cut back to 50% (aggregate) output 10pm Friday then down to 30% at 2am Saturday, then back to 45% by 8pm Saturday.
Sual 2 still out continuously.
We lost Calaca 2 at 4pm Saturday but it re-started at midnight.
Sta. Rita 6 (which is actually San Lorenzo 2) began having problems at midnight Friday and we essentially lost it completely at 5am Saturday.
I can’t detect any problem with gas supply limitations at Sta. Rita/San Lorenzo - so if there is indeed a gas supply issue, it seems to be limited to Ilijan.
What Caused the Shortage of Supply Last Night?
Here’s a news article with quotes from Meralco.
The table above is mine where - I massaged data downloaded from the WESM web site. It shows the hourly generation at the Luzon coal and gas plants, by hour, for yesterday.
Note that as of 9pm, all of these major units were running at essentially 100% of their capability - except for Sual 2 which has been down for the past three days and Calaca 1 not shown because it’s been off-line since October of 2011 for rehab. Calaca 2 was slightly de-rated.
Something happened after 9pm, because Ilijan, which had been running at it’s full rating of 1,200 MW dropped back to 600 MW, or 50% of its rating.
Now, WESM hasn’t published the file for Saturday yet. So I can’t tell what happened after midnight. But apparently at 12:32am Sual 1 tripped off-line. That’s a huge loss. The total Luzon load [note I’ve corrected this] at that time was around 5,700 MW. So that’s 11% of the Luzon load.
Also, the article cites “limitations of supply” at Sta. Rita and San Lorenzo, which at midnight were running full capacity. So whatever happened at Ilijan (such as a gas supply constraint) may have spilled over to the First Gas plants after midnight? Note that one of the units at San Lorenzo started feeling the pinch at midnight - it dropped by 85 MW from the previous hours.
I note that we’re also setting historical high load levels over the past 60 days - both on-peak and off-peak.
Hi Nick! You're doing so well here! I was wondering if there is (will be) a 'transmission loss factor' or any Philippine Standard (an oxymoron!!!)? I am aware there is a 'systems loss cap' closely monitored by ERC which accounts for non-technical and technical losses. Thanks, Troy
Hi Troy. The Systems Loss Cap you mentioned refers to losses on the Distribution system. I read your question as asking me if there is something similar for the Transmission system which is owned and operated by NGCP. Correct?
Frankly, I havent’ dug deeply into ERC’s regulation of NGCP. They are under performance-based ratemaking similar to the private DUs. I also know that they retain very capable outside, international consulting expertise to assist in the regulation of NGCP. I don’t know how transmission systems loss enters into the regulatory equation.
I also note that actual systems loss on the transmission system is not only a function of the physical transmission network, but also a function of generation dispatch directed by the Market Operator (PEMC) and DU loads.
Bottom line: I don’t know the answer.
This June, you will notice a 71-centavo/kWh increase in your electric bill. While Meralco did not increase the rates for distribution charges, there was a rate increase in the Wholesale Electricity Spot Market (WESM) due to the unavailability of two of the biggest and cheapest energy sources: the Sual Power Plant run by San Miguel Energy, and the Pagbilao Power Plant run by Aboitiz Power.
Quote from Meralco
Here’s a look at what the two Sual and the two Pagbilao units were doing in the May billing month.
Sual 2 was down about four days, Sual 1 struggled for 3 or 4 days, and Pagbilao 1 was offline for a week. Here is a chart showing the daily average MW from these plants and I’ve overlaid the daily average WESM price.
Interestingly, these four units generated more kWhs in May than they did the previous month. And there’s not a lot of correlation between the capacity line and the WESM price bars in the chart above. The issue is not quite as simple as just Sual and Pagbilao unavailability, but it is a significant component.
Here is a chart of May WESM prices in the context of the two prior months. I’ve plotted the average monthly price too.
Meralco’s WESM costs depends on when they were in the market and for how much volume. Presuming they were primarily in the market during Peak period hours, you can see that peak prices took a whopping 91% jump from P4.00/kWh in April to P7.65/kWh in May. But that’s partly because April was a low month compared to March.
Another issue is that I took a preliminary peek at WESM load levels and if I’m not mistaken, loads may have increased by as much as 10% in May compared to April. That in and of itself will tend to move WESM prices up quite significantly, regardless of Sual and Pagbilao.
So there are a number of things going on. I haven’t totally digested it yet.