Philippines to Hold First Natural Gas Power Plant Auction This Year

The Department of Energy (DoE) said it is moving forward with plans to stage the country’s first auction dedicated to natural gas, with contracts targeted to be awarded by the fourth quarter this year. “We are really targeting before the end of the year so we can award,” Energy Secretary Sharon S. Garin said last week. Last month, the DoE issued guidelines for the mid-merit natural gas capacity auction, positioning the technology as a “transition fuel” to support the shift to clean and sustainable energy. This follows the enactment of Republic Act No. 12120, or the Philippine Natural Gas Industry Development Act last year, which promotes the use of natural gas over imported varieties and other conventional energy sources. “The increasing penetration of variable renewable energy…thereby necessitating the strategic procurement of flexible mid-merit capacity to mitigate intermittency and maintain the continuous reliability and stability of the national grid,” according to the circular. The auction is open to operators of existing, uncommitted existing, newly built, and upgraded natural gas facilities. “We want to encourage more mid-merit capacity and gas-fired power plants are really what fit best,” Ms. Garin said. “(Gas facilities) won’t be damaged when ramping up and down, and it can respond faster than coal. Coal is slower, though cheaper. Diesel, on the other hand, is more expensive but also fast. So the middle ground is gas,” she added. She said the department has yet to determine the installation target for the planned auction. Earlier this month, the DoE’s Natural Gas Auction Committee conducted on-site technical assessments of the country’s two liquefied natural gas import and regasification complexes which are the 2,475-megawatt (MW) LNGPH Batangas Complex and Prime CoreGen’s 2,011-MW LNG Complex. “The gas auction recognizes natural gas as a transition fuel in support of the Philippines’ transition toward a clean, sustainable, and appropriate energy mix, while helping maintain system reliability and cost-efficiency,” the DoE said. — Sheldeen Joy Talavera