WESM expansion boosts renewable energy in Philippine power mix

The Wholesale Electricity Spot Market now accounts for 12.80 terawatt hours, or 19.4 percent of customer electricity consumption as of July 2025, reflecting a growing role in integrating renewable energy into the country’s power system.

Independent Electricity Market Operator of the Philippines data showed that of 482 registered market participants, 420 are actively trading, including 243 generation companies, distribution utilities, electric cooperatives, and retail suppliers under the Retail Competition and Open Access program.

Mindanao’s entry into the market in 2023 completed the nationwide rollout of WESM.

“Solar and wind have been steadily growing in the mix, supported by policies such as the Renewable Portfolio Standards, the Green Energy Auction Program, and the Green Energy Option Program,” IEMOP’s Engr. Arjon B. Valencia said at the 3rd Renewable Energy Conference on Aug. 8.

The Green Energy Option Program allows customers with demand of at least 100 kilowatts to source power directly from renewable energy providers.

Valencia noted that average market prices dropped to PHP 4.14 per kilowatt-hour in the first half of 2025, the lowest in five years, down from PHP 5.58 in 2024 and PHP 6.44 in 2023.

He attributed the decline to stronger renewable output and improved supply conditions but cautioned that prices remain vulnerable to outages, global fuel volatility, and demand shifts.

Renewables now represent 25.3 percent of registered capacity in Luzon, 47.8 percent in Visayas, and 29.1 percent in Mindanao, although actual renewable generation accounts for 24 percent of the total energy mix.

Retail aggregation has also pushed the retail electricity market’s share from 22 percent to 24 percent this year, with more industries switching suppliers.

Challenges remain, including the need for flexible generation, improved forecasting, and more ancillary services to stabilize supply.

Transmission constraints continue to drive regional price differences, though infrastructure upgrades since 2024 have eased congestion and contributed to more stable pricing.

Valencia said IEMOP will continue refining market systems by enhancing monitoring, advancing toward real-time operations, and preparing a capacity market to support renewable integration and ensure transparency in electricity trading.