Environmental group Power for People (P4P) Coalition is urging the Department of Energy (DOE) to reconsider plans to build more natural gas plants in its ongoing review of the Philippine Energy Plan, saying it could lead to high electricity prices.
P4P said the DOE has admitted the price of liquefied natural gas (LNG) is largely associated with the price of oil which is expected to be volatile in the next five years.
“The price of LNG reached all-time highs this year especially in Asia, Europe and even the United States. With its vulnerability to supply and demand fluctuations and with many financiers tightening their belt on fossil gas financing, it appears this so-called transition fuel’ may after all be bringing us not to an energy transition but to an energy affordability and stability crisis,” said Gerry Arances, P4P convenor, in a statement.
The DOE earlier said impacts of LNG price movements to consumers will be easily mitigated by the strict implementation of the competitive selection process (CSP) which mandates power distributors to conduct price challenges to procure the cheapest source available.
However, Arances said CSP will not be effective in protecting consumers from such price increases “if terms that will shield them from additional charges and price increases over time are lacking or totally absent, which we saw was the case for recent tenders that ended up in favor of fossil fuel companies.”
Based on the DOE’s PEP, a projected addition of at least 18 gigawatts (GW) of new natural gas capacity in the Philippines is possible by 2040.
As of end-2020, the Philippines’ current total installed capacity from natural-gas fired power plants totalled to 3.5 GW or 13 percent of the mix while total generation from the said source for the similar period hit 19,497 gigawatt hours equivalent to 19 percent of the mix. – Jed Macapagal
