Prime Infrastructure Capital Inc.’s subsidiary Prime CoreGen plans to participate in upcoming government auctions for mid-merit natural gas capacity to bolster grid stability as the Philippines integrates more renewable energy.
Prime CoreGen president Jose Victor Emmanuel De Dios lauded the Department of Energy (DOE) for the initiative, noting that gas technology is essential for the country’s power generation sector.
The DOE announced in March that competitive auctions are necessary to secure additional capacity based on supply-demand projections and reliability requirements in the Visayas, Mindanao, and off-grid regions.
“I think it’s a very appropriate and relevant initiative by the DOE to address grid stability in the face of increasing variable RE in the country,” De Dios said.
The auctions aim to address a gap in the current energy mix where natural gas capacity is insufficient to handle mid-merit demands. The shortage often forces coal-fired plants to operate beyond their technical limits to manage daily load changes, which increases the risk of outages. In the Visayas and Mindanao, the lack of gas-fired power leaves the system dependent on coal and oil-based generation.
De Dios described gas technology as flexible, noting it can adjust quickly when renewable sources diminish.
“In fact, the Department of Energy is scheduling a mid-merit auction to ensure, over the longer term horizon, that there is a fuel, there is a generation that will bridge your declining or diminishing coal-fired generation and your increasing variable renewable energy generation. Something in the middle. So it’s not merely a transition,” De Dios said.
The Natural Gas Auction Committee will determine the capacity for auction based on the latest Power Development Plan. To ensure competitive pricing, the Energy Regulatory Commission will set a Gas Auction Threshold (GAT) price to serve as a ceiling for bids. Winning bidders will receive compensation based on approved prices for energy delivered to the grid.
Prime Infra expanded its energy footprint last year by acquiring a majority stake in gas subsidiaries of First Gen Corp.
The move gave the company control over 2,047 megawatts (MW) of operational capacity across the Santa Rita, San Lorenzo, San Gabriel and Avion plants. The acquisition also included the proposed 1,200 MW Santa Maria plant and an offshore liquefied natural gas terminal.
The DOE said a centralized auction is the most efficient and transparent way to procure capacity while allowing companies full recovery of reasonable economic costs.
