The Manila Electric Co. (Meralco) is taking proactive steps to secure an additional 900 megawatts (MW) of power supply for the upcoming hot months. According to Lawrence Fernandez, Meralco vice president and head of utility economics, the power distributor anticipates a significant increase in demand, particularly from the first quarter through the summer season of 2025.
In response to this projected demand spike, Meralco is preparing emergency power supply agreements (PSAs) and inviting suppliers and generation companies to submit offers. Fernandez confirmed the need for new power contracts has become urgent, as two five-year agreements with suppliers expired at the end of 2024, alongside the termination of two other contracts.
Also, the Independent Electricity Market Operator of the Philippines (IEMOP) has raised concerns about potential price increases at the Wholesale Electricity Spot Market (WESM) as a result of higher demand during the hot months. Chris Warren Manalo, assistant manager at IEMOP, attributed the expected price hike to the traditional supply-demand dynamics, noting that higher temperatures in the months ahead historically trigger increased electricity consumption, driving market prices higher.
Despite these concerns, IEMOP reported a drop in WESM prices in January 2025. The average price of electricity at the spot market fell by 14.3 percent from December last year, the lowest since January 2023 at P2.96 per kilowatt-hour (kWh). The cut in prices is attributed to a favorable supply margin driven by lower system demand amidst cooler temperatures.
The combination of Meralco’s efforts to secure additional power and the anticipated WESM price fluctuations underscores the critical role of power supply management in ensuring stability during the high-demand summer months.
