The Wholesale Electricity Spot Market (WESM) price per kilowatt-hour (kWh) in the Philippines has seen a significant increase in recent months. According to the latest data, the average WESM price for June was P9.56, up from P7.79 in May and P5.63 in April. This marked a 147.7% increase compared to the same period last year, mainly due to higher energy prices resulting from the ongoing conflict in the Middle East.
During a press conference held by the Energy Regulatory Commission (ERC), Chairman Francis Saturnino “Nino” Juan highlighted the commission's achievements, including the resolution of pending cases and the reduction of the contestability threshold from 500 kilowatts (kW) to 100 kW. However, the ERC's focus on renewable energy (RE) has raised concerns among some groups, who argue that the commission is favoring expensive and unstable RE sources.
At the ERC press conference, a journalist asked Mr. Juan if the commission is playing favorites with RE. Mr. Juan replied that all types of power projects, including coal, natural gas, and RE, are subject to the same regulatory processes for obtaining permits. The ERC is also focused on the least cost for consumers and mandates power procurement through a competitive selection process (CSP).
The increasing incidence of daytime prices being lower than nighttime prices, also known as the "duck curve," has been a growing concern. IEMOP Vice-President Sid Cacho acknowledged that the duck curve is happening more often this year. This trend can be attributed to the increasing supply of solar power and the resulting decline in prices during the day.
The commission's decision to award offshore wind (OSW) a green energy auction (GEA) rate of up to P11/kWh for 20 years has raised eyebrows. This rate is significantly higher than the current WESM price and has been criticized for resulting in more expensive electricity for consumers. The journalist who raised this concern noted that the formula will lead to double price hikes, both through the GEA-Allowance (GEA-All) and higher transmission charges.
Other countries, including Vietnam, Indonesia, Malaysia, and Thailand, produce more electricity than the Philippines and have bigger GDPs and merchandise exports. The idea that the Philippines should exit early from using coal for power generation has been met with skepticism, with some arguing that it is a juvenile and irrational concern. The persistent bullying by climate establishments and multilaterals to shut down coal plants early is seen as irrational thinking.
The cost of the transmission lines and submarine cables needed for offshore wind projects will be huge, and the cost will be passed on to consumers. The Energy department is urged to review the cost for consumers and taxpayers funding the huge ports and related facilities needed. Some experts argue that there should be no special rate for any specific technology and that GEA should let all RE technologies compete among themselves.
As the debate on energy policy continues, concerns about the impact of the ERC's decisions on consumers remain. The need for a more balanced approach that prioritizes the least cost for consumers and ensures competition among RE technologies is becoming increasingly clear.
