The main impetus to shift to LNG is to harness it as a cleaner alternative to coal as fuel for baseload power plants of the country
Recent news on three of the country’s biggest power supply companies Aboitiz Power Corp., Meralco PowerGen Corp. (MGen), and San Miguel Global Power Holdings Corp. (SMGP) uniting to respond to the government’s call to invest in cleaner energy to supply the surging demand of our recovering economy is a very encouraging development never before seen in such a scale and strategic significance, and between the largest competing players of the power and energy industry.
The three giant power companies are venturing into a $3.3 billion Liquefied Natural Gas facility, now under construction and will start operations by end of this year, which will be the country’s first and biggest envisioned to produce 2,500 megawatts generation capacity of baseload power.
Manuel Pangilinan, the Chairman and CEO of Manila Electric Company, in a published statement, said, “Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future.
“We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future.”
Sabin Aboitiz, the chairman of AboitizPower, quoted in a public statement, said, “Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition.
“Above all, this is a big win for the Philippines and the people. Economic development is impossible without energy security, and this investment is a definitive step forward in that direction.”
Ramon S. Ang, Chairman and President of San Miguel Global Power Holdings Corp. likewise said, “For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources.
“This represents a major leap forward for our energy future, ensuring not just reliability but also cost-efficient power for many Filipinos.”
This is indeed an unprecedented and a most positive development that has significant dimensions beyond augmenting the country’s energy security with 2,500 megawatts when this project is fully operational.
The team-up of three giant conglomerates, all competitors in other industries, sends a strong signal to other potential investors, both local and foreign, of the confidence the leadership of these high performing companies have in the long term economic potential of the Philippines.
This may well be a new investment model that will inspire more local and foreign investments specially in the critical infrastructure where there must be long term predictability and stability despite the six year political cycles of government administrations.
Secretary Arsenio Balisacan of the National Economic and Development Authority said earlier that to meet the target power generation mix by 2040, the Philippines will need $103.6-billion which at the current exchange rate translates to P5.8-trillion investments in renewable energy projects.
The main impetus to shift to LNG is to harness it as a cleaner alternative to coal as fuel for baseload power plants.
It is considered as a transition or bridge fuel as we wait for renewable energy generation becomes cheaper and power storage technologies mature to solve the unstable nature of RE technologies such as solar and wind.
Several studies attest that LNG as fuel has about half the carbon emissions compared to coal burned in power plants.
The DOE’s Power Demand and Supply Outlook, 2020-2040 says, “The country’s peak demand is expected to increase by almost four folds from 2020 to 2040 which is equivalent to about 7% growth annually.”
This outlook clearly shows the urgency of accelerating baseload capacity builds to stay ahead of the rising demand for power, which is actually a good challenge as more economic growth obviously creates more demand for electricity.
As expected in the free democratic space of our society, there are those that allege that this cooperation of the Aboitiz, Meralco, and San Miguel power companies as a sort of monopolizing move.
On the contrary, it sets a new standard where more energy players are most welcome to step up with their own initiatives that will offer the best clean technologies and at the most competitive rates for consumers.