Section 37(c) of the Electric Power Industry Reform Act or EPIRA mandates the DOE to annually update the Power Development Program (PDP) and integrate the same into the Philippine Energy Plan. With this, the PDP must consider and integrate the individual or joint development plans of the transmission, generation, and distribution sectors of the electric power industry.
Based on the PDP simulations, to be able to achieve the renewable energy (RE) targets of 35 percent by 2030 and 50 percent by 2040, and at the same time ensure the reliability of the power system, the support technologies such as energy storage system (ESS), flexible power plants such as natural gas-fueled power plants are crucial. Natural gas-fired power plants can serve as quick starting reserves which could complement the variability of RE technologies such as solar and wind.
Transitioning to clean energy to achieve the countrys energy security goals would also require a transition fuel capable of providing baseload generation that would fill in the gap when existing coal-fired power plants start to retire. Natural gas, therefore, is seen as a suitable transition fuel by which the private sector investments in this technology will be facilitated as a way to enable the viability of large RE capacity additions and ensure the reliability and security of the power system.
Meanwhile, with the Malampaya gas depleting and the cost of imported Liquefied Natural Gas (LNG) slightly higher than the indigenous Malampaya, the draft policy is espousing a gas aggregation scheme in order for the distribution utilities (DUs) within the Luzon grid to benefit in a relatively lower price of blended imported LNG and natural gas from the Malampaya. Getting a minimum percentage of power supply from natural gas, on the other hand, would give the DUs an advantage of taking a competitive price without going through the competitive selection process (CSP). With the eventual reduction of capacity from coal-fired power plant, natural gas will be the immediate option for the DUs either as baseload, midrange, and peaking requirement because of its flexibility, and with much less harm to environment. LNG is transitory and not an end in itself. The ultimate trajectory is to transition LNG plants to non-fossil-based fuels once the latter are mature. ###