IEMOP forecasts stable 2026 supply for Luzon, Mindanao

The Independent Electricity Market Operator of the Philippines (IEMOP) projects a stable power supply for the Luzon and Mindanao grids in 2026, but warns that the Visayas grid remains vulnerable to tight reserves due to its dependence on imports and limited local capacity.

IEMOP Head of Trading Operations Isidro Cacho Jr. said the Visayas region has become “heavily dependent” on power imports from Luzon and Mindanao, leaving it exposed to the immediate impacts of forced outages elsewhere in the network.

“If we encounter what happened last year… we will see not just in Visayas, but I think even in Luzon,” Cacho said, referencing past events when several thousand megawatts (MW) of generating capacity went offline simultaneously.

Electricity demand is expected to grow around 5% next year in line with economic activity, based on Department of Energy (DOE) projections.

For Luzon, peak demand may rise from 14,000 MW in 2025 to approximately 14,600 MW in 2026.

Similar growth patterns are anticipated for the Visayas and Mindanao.

Cacho noted that spot market prices in 2025 generally ranged between PHP 3 and PHP 5 per kilowatt-hour, with fluctuations caused by outages and seasonal conditions.

He added that 2026 market prices for Luzon are expected to hover around PHP 5/kWh under normal conditions.

However, Visayas prices could rise higher due to its thinner reserves and reliance on costlier technologies like batteries and diesel.

If forced outages occur, rates may reach PHP 6–PHP 7 per kilowatt hour (kWh).

Cacho also pointed out that price spikes are now more common between 6:00 p.m. and 7:00 p.m., coinciding with declining solar output—marking a shift from past years when early morning volatility was more prevalent.

While new renewable energy projects are expected to come online in 2026, some remain in the testing and commissioning stages.

“Their commercial timelines might be delayed,” Cacho said, tempering expectations for immediate price relief.

He emphasized that despite better generator performance this year, the market remains sensitive to unplanned shutdowns.

“Our prayer is that there should be no force outages, especially during those periods,” he said, referring to the first and third quarters, which typically see concentrated maintenance schedules.

System-wide market data from October 2024 to November 2025 shows that spot market transactions made up 12% to 23% of monthly metered energy.

ESSP (Energy Supply and Scheduling Platform) values also varied monthly, reflecting the short-term volatility driven by outages, demand surges, and evolving technology mixes.

Cacho maintained that while the market is resilient, it continues to face risks tied to operational disruptions and grid-specific constraints.

This warning comes on the heels of a yellow alert issued for the Visayas grid on December 11.

The National Grid Corporation of the Philippines (NGCP) reported a narrow reserve margin during the 5:00 p.m. to 6:00 p.m. window, with capacity at 2,578 MW against a projected demand of 2,535 MW.

The alert stemmed from several issues: 10 plants were on forced outage between April and December, 16 units were operating at reduced capacity, and key facilities like KSPC Unit 2 and Agus 6 remained offline. A total of 482.41 MW was unavailable to the grid that day.

NGCP later lifted the yellow alert after available capacity increased to 2,760 MW and demand dropped to 2,421 MW by 1:00 p.m.

The grid operator clarified that a yellow alert is issued when operating reserves fall below required contingency levels.

Luzon and Mindanao grids remained in normal operating condition throughout the day, according to NGCP.