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Wholesale electricity prices could climb to as high as ₱9 per kilowatt-hour (kWh) in the coming weeks as persistent supply shortages in the Visayas and recent power plant outages in Mindanao continue to tighten available capacity, according to the Independent Electricity Market Operator of the Philippines Inc. (IEMOP).
The warning comes amid recurring grid alerts in the Visayas and operational disruptions affecting several major generating facilities, conditions that have already pushed Wholesale Electricity Spot Market (WESM) prices significantly higher during the May billing period.
Speaking during a briefing on Wednesday, IEMOP Head of Trading Operations Isidro Cacho Jr. said market prices remain vulnerable to further increases if supply conditions in the Visayas and Mindanao do not improve.
“Today, and for the past weeks, we saw that Visayas has a thin power supply; of course, that reflects into market prices,” Cacho said, noting that several generating units in the region have experienced forced outages.
Tight Supply
The Visayas grid has been repeatedly placed under yellow and red alerts as available generation struggled to keep pace with demand.
On Tuesday, the National Grid Corporation of the Philippines (NGCP) declared a yellow alert over the Visayas grid from 5 p.m. to 8 p.m., citing insufficient operating reserves due to the continued unavailability of several major coal-fired power plants.
NGCP projected peak demand during the period at 2,457 megawatts (MW), while available capacity stood at only 2,644 MW, leaving a narrow reserve margin.
The grid operator reported that 23 power plants were on forced outage while another 12 were operating at reduced capacities. These conditions removed a total of 890.3 MW from the system.
Among the major generating units unavailable were Therma Visayas Inc. Units 1 and 2, each with a capacity of 169 MW, and Panay Energy Development Corporation Unit 3, which has a capacity of 150 MW.
A yellow alert is issued when reserve levels fall below the grid’s contingency requirement, signaling tight supply conditions although not necessarily resulting in power interruptions.
The situation escalated further on Wednesday when the Visayas grid was placed under a red alert from 1 p.m. to 7 p.m., followed by a yellow alert from 7 p.m. to 9 p.m.
Earthquake Impact
Power supply concerns were also aggravated by a magnitude 7.8 earthquake that affected parts of Mindanao earlier this week.
According to Cacho, the seismic event disrupted operations at two major coal-fired power plants: the 300-MW Malita coal plant of San Miguel Corp. in Davao Occidental and the 237-MW Sarangani Energy Corp. coal plant.
The outages reduced available generation in Mindanao and limited electricity transfers to the Visayas, which relies on imported power to supplement local supply.
As a result, NGCP also placed the Mindanao grid under a yellow alert from noon to 3 p.m. on Wednesday.
Cacho said some of the affected generating units were expected to return to service within the week. The first unit of the Malita plant and two units of the Sarangani facility were scheduled for restoration on Wednesday, while the second unit of the Malita plant was expected to resume operations by June 13.
Despite the anticipated restoration, market operators remain cautious about the impact of ongoing forced outages on electricity prices.
Prices Surge Across All Grids
The tightening supply situation has already translated into higher spot market prices nationwide.
IEMOP data showed the average WESM system price rose to ₱7.79/kWh in May, representing a 38.5-percent increase from ₱5.63/kWh recorded in April.
The Visayas posted the sharpest increase, with average prices reaching ₱10.20/kWh in May, up 81.4 percent from the previous month. Mindanao followed with a 64.8-percent increase to ₱9.28/kWh, while Luzon recorded a 24.8-percent rise to ₱7.02/kWh.
Cacho said WESM prices could approach the ₱9/kWh level if supply remains constrained, although seasonal factors may help temper the increase.
“With the rainy season, demand is expected to ease,” he said. Lower temperatures and reduced electricity consumption could provide some relief to the market, but he stressed that supply availability remains the more critical factor.
Demand Growth Outpaces Supply
Even as overall generation capacity increased, demand continued to grow at a faster pace.
IEMOP reported that system supply in May rose by 2.7 percent to 21,374 MW. However, electricity demand increased by 9.4 percent to 15,755 MW, placing additional pressure on reserves and contributing to higher market clearing prices.
The latest developments highlight the continuing challenges facing the country’s power sector, particularly in regions dependent on imported electricity and vulnerable to generating unit outages.
Market observers are expected to closely monitor the return of affected power plants and the frequency of future grid alerts, both of which could influence electricity prices in the coming weeks as the country transitions deeper into the rainy season.
Source:
https://business.inquirer.net/594635/visayas-grid-back-under-yellow-alert-on-june-10
https://mb.com.ph/2026/06/10/visayas-alerts-mindanao-outages-threaten-fresh-power-price-surge