Green Tiger Markets PH Electricity July Update
Dear Green Tiger Market Client,
The first half of 2025 is now behind us. The year so far can be charecterized as quite calm with generally subdued prices, a welcome boon for consumers. This year has seen ample generation reserve margins with cheaper fuels on the margin more frequently. There has been very little utilization of diesel so far this year, mostly because prices have not warranted it.
Through June, Luzon Baseload has averaged a hair under 4Php/Kwh for the Load Weighted Average Price. Last year, the first 6 months averaged approximately 5.8P/Kwh. A ~30% decline year on year. By day segment, the Midday prices have seen the most downside pressure, down 42% while Evenings are 26% lower year on year. These movements in realized spot prices are rather dramatic and a welcome respite after a few years of extremely high prices.
Downside pressure in prices continues to come from multiple sources which are all conspiring to make supply/demand balances looser year on year. Some of the key factors driving the decline in prices include:
Substantially cheaper coal prices, including a 30% decline in Newcastle prices
Increased supply from both Natural Gas and Solar generation
Cooler temperatures and thus lower loads
Greater grid connectivity and transmission upgrades
Looking to the future, where might prices end up? The final 6 months of 2024 averaged 4.6. While we do expect that prices will continue to be soft, as more generation gets connected through year end, we don't expect prices to average 30% under last year. Our forecast is closer to 15% under last year, leaving an average of 3.9 for 2025.
Interested in learning more about how to improve supply/demand balance forecasting?
Areas of Focus for Hedging in May
Continued buyside interest from RES to lock in margins
Continued interest in outright months and strips in 2025
Sellers are sniffing around in 2026, and now 2027
We are working several orders for 2025 Luzon baseload power. Midday hours are generally being offered at 15-25% below baseload prices while bids have been scarce. Evening hours are generally being bid at 130-150% of Baseload, with offers being scarce. Here are some of the most intriguing opportunities, all values in quoted in PHP/Mwh:
October-December Baseload: 4200 bid @ 4500 offered
July- December: 4600 bid @ 5200 offered
Cal 26 5000 bid @ 5300 offered
We're witnessing a increase in activity from a variety of participants looking to lock in prices for the balance of the year. In general, the bids that we are seeing are quite strong, often well in excess of last year's prices.
Live pricing levels
As prices continue to fluctuate with the changing market dynamics, we kindly request that you contact us directly for the most up-to-date and comprehensive list of orders we are currently handling. Thank you!
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Since our last update, the Philippines electricity market has continued to experience notable shifts in WESM pricing, reflecting both market dynamics and structural advancements. In June 2025, WESM recorded a price decline, month on month, of about 7%, dropping to PHP 3908/MWh from PHP 4224/MWh in May. The price decline was driven by increased supply availability combined with modest demand, leaving significant reserve margins, as reported by IEMOP.
June only saw three hours that priced over 20P/Kwh. In fact, June had more hours trading negative (four), than "expensive" hours.
Midday prices continue to feel downward pressure, though not as significant as last month. We saw a few hours of negative pricing in the Midday last month, causing prices to average about 8% under baseload. Our expectations are that Midday Hours pricing will continue to deteriorate into year end as more solar projects are tied in and energized.
Of note, the spread between Luzon and Visayas has continued to be almost non-existant. We were regularly seeing Visayas print 1000 or 2000 pesos over Luzon last year. The last few months have had them priceing out right on top of one another. It doesnt take much new generation at the margin to put a cap on Visayas and the greater grid connectivity is helping as well.
As we step into July, prices have been continued to be soft. Our early look has July coming in around 3900 so far, substantially weaker than where the forwards were just a few weeks ago, but flat to last month's pricing. We had been expecting to see some stress in the grid for summer load, but those fears have yet to realize.
#1 Baseload Prices by Region
In our second graph below, we have plotted the 8 hour time block contracts as well as Baseload. Evening prices had been headed steadily lower since popping during the March outages. The downtrend resumed in June and will likely persist given the incremental solar coming to the market and the new gas fired thermal plants will have fewer premium hours to amortize their fixed costs over. There has been virtually zero need for diesel to run
Midday Hours continue dislocating lower on occasion, with steady repricing for the Midday Hours to match Morning Hours. For more developed electricity markets we often see Morning hours trade premium to Midday hours.
Evening hours could see pressure from some of the new gen that is being connected through the balance of the year, but it is a very much wait and see for the evening hours.
#2 Luzon prices by 8hr time block
In our third graph below, we have plotted the ratios of the individual 8 hour products to Baseload. The Evening Hours have retraced quite a lot as there have been very few hours where diesel is required. The panic that existed in the market appears to be abating. Midday and Morning Hours continue to be relative to baseload, but given the overall decline in prices, they appear a bit stronger on a relative basis. We saw Evening Hours prices clear roughly 35% over baseload for June and Midday running 5% below baseload, one of its best relative performances of the year.
#3 Luzon monthly ratios by product
Year-on-Year comparison
This year looks significantly different from the last few years. June resumed the weakness after the brief spike in March prices. On the year, Baseload is averaging under 4000, or a full 1800 php below last year. What does this mean for the balance of the year and into 2026??? Will 2025 average in the 3s? Typically the second half of the year prices lower than the first half.
#4 Luzon and Visayas Baseload by year
Hourly Pricing
Below we have plotted hourly prices by region. Last month saw an overall flattening of the evening relative to months past. The "Duck Curve" was not as pronounced this past month. Also interesting to note is that all three grids are frequently trading the same price.
#5 Hourly Prices by Region
If you are interested in learning more about our data analysis, please don't hesitate to contact us at [email protected].
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Market News
As per our usual practice, we have incorporated a selection of recent news stories and emerging trends in the PH electricity market. If there are any noteworthy events you would like us to share, kindly inform us! Enjoy!
Aboitiz power to build 30Mw battery in Cebu:
BESS within the Mactan Economic Zone
Read more here
Coal Price Outlook
Newcastle coal features are hovering just above $110/ton and stabilizing
See the commentary here
Chair Monalisa Dimalanta has tendered her resignation:
Chair Mona’s term was set to expire in 2029
LNG imports set to rise by over 500%:
Study suggests that renewables could be a cheaper source of power than imported natural gas.
Read more here
Newly appointed (DOE) Secretary Sharon S. Garin to maintain previous strategy:
She emphasizes policy continuity.
Read more here
AboitizPower/Sumitomo to take over CBK Hydro facility in 2026:
The privatization of the CBK dam appears to be going through after a successful 36bn peso bid.
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Stay safe and thank you for your business!
-John Knorring, CEO Green Tiger Markets
*The views contained in this newsletter are my own opinion and should not be considered investment advice or relied upon to make investment decisions. Disclaimer.
