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MECQ triggers 700-MW drop in electricity demand

With new wave of stymied economic activities, the demand for electricity in the Luzon grid had plunged by 700 megawatts (MW) again following the government’s enforcement of modified enhanced community quarantine (MECQ) in Metro Manila and nearby provinces.

In a presentation to the media, Robinson P. Descanzo, chief operating officer (COO) of the Independent Electricity Market Operator of the Philippines (IEMOP), indicated that on the first and second days of the MECQ, the drop in power demand had already been manifest compared to a higher base of electricity usage on last month’s general community quarantine (GCQ) phase.

In particular, the spot market registered peak demand of 12,229 megawatts last July 27; and then that plummeted to 11,533MW on August 5 or an average demand decline of 700MW.

Descanzo further highlighted the softening of spot prices to P2.00 per kilowatt hour (kWh) during the MECQ period versus last month’s average settlement price of P3.19 per kWh.

He nevertheless qualified that the downtrend in power demand may only stay during the stricter lockdown period from August 4-18; and this may climb back to the 12,000 plus MW level starting August 19 or at the end of the MECQ enforcement.

On prices, Descanzo indicated the trend may be sustained at the level of P2.00 per kWh throughout the month of August “since we relatively have low system demand,” that is in reference to the low consumption that is typical during rainy season because of cooler temperatures.

The only major intervening factor that could trigger hikes in spot prices, he said, would be forced outages in power plants, a dilemma that often strains the country’s power system.

“The price plays around that (P2.00 per kWh) based on the offer of the baseload plants. I think that will be the persisting trend as long as the base load plants won’t be on forced outages,” the IEMOP executive explained.

The shift of higher consumption to the residential sector during stricter lockdowns had also been marked by the spot market operator, although it said, it does not have specific figures and studies yet as to the scale of reduction in usage per segment including those in commercial and industrial sectors.

Throughout the remaining months of the year, Descanzo emphasized that demand may stabilize at the higher base of more than 12,000MW, especially with targeted ramp up of production in manufacturing to prepare for the Christmas holidays.

He likewise noted that while the coronavirus pandemic temporarily reduced power consumption, this may only delay anticipated supply tightening by about one year; hence, capacity addition concerns may recur as a critical industry concern by year 2022.


Source: Manila Bulletin (https://mb.com.ph/2020/08/11/mecq-triggers-700-mw-drop-in-electricity-demand/?utm_source=rss&utm_medium=rss&utm_campaign=mecq-triggers-700-mw-drop-in-electricity-demand)

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