Market Event

The Department of Energy (DoE) said Thursday that it does not expect to issue any red alerts on the Luzon grid in the next nine weeks, after releasing an updated power outlook from the transmission company. However, the DoE added yellow alerts are possible until July.

Opinion

Cited reasons behind the impending tightening energy supply in the near term are the extended outages of some power plants, particularly SCC’s 300-MW Sem-Calaca Unit 2 and AP’s 316MW GN Power Mariveles Unit 1. We note also that SCC’s 150-MW SLPGC Unit 2 is also down. These may cause a drag on both power companies’ 1H21 revenues, offsetting potential gains from higher WESM prices amidst tightening supply. The expected underperformance may continue to weigh on both companies’ shares and may even stir further selloff.

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