Rising global fuel prices could drive up power prices in the Wholesale Electricity Spot Market (WESM), particularly if international supply disruptions continue, according to simulations of the Independent Electricity Market Operator of the Philippines (IEMOP). | @bworldph
The WESM is an avenue where electricity is bought and sold in real-time.
In a meeting of the Energy Regulatory Commission (ERC), IEMOP examined scenarios involving increases in international coal, oil, and liquefied natural gas prices, as well as possible supply constraints in the power system.
The results showed that higher fuel costs may cause spot prices to rise, as power generators reflect higher fuel costs in their market offers.
“Price pressures may intensify under scenarios involving forced outages of large generating units, which could tighten supply,” the ERC said, citing IEMOP’s analysis.
The ERC noted that there are safeguards in place like the secondary price cap, which is automatically triggered if prolonged price spikes exceed thresholds.
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