DOE bets on LNG to prevent Luzon brownout

By Myrna M. Velasco – November 24, 2022, 2:55 PM
from Manila Bulletin

The Department of Energy (DOE) is now placing its bet on the entry of liquefied natural gas (LNG) as one of the “immediate fixes” to save Luzon consumers from blackouts during the summer months.

“Our foremost concern is to ensure that there is enough capacity supplied through various sources most especially in the coming summer months to sustain the power supply in the country,” Energy Secretary Raphael P.M. Lotilla said.

Luzon grid is seen most vulnerable to be tormented with “red alert”, an extreme deficiency on reserves in the power system that could result in power interruptions or blackouts.

The DOE is counting on the commissioning and commercial operation of the LNG terminal of AG&P and Linseed Field Power Corp by March and April 2023 as well as the commissioning of the LNG facility of First Gen Corporation by March 2023 and operation by June 2023 to avoid power outages.

At this stage, however, it was gathered from off-takers of LNG facilities that there is difficulty contracting gas from the international market given the geopolitical uncertainties due to the Russia-Ukraine war.

The energy department has not given definitive statements yet on what consumers could expect on the shift of the gas plants to LNG during the summer months, primarily on account of persisting surge in gas prices globally.

Apart from the LNG-generated capacities, the DOE is looking at additional supply from coal-fired plants in Bataan but which have been hindered by transmission constraints.

The DOE explained that the capacities from these plants are already available, but injection into the grid once the transmission line is completed.

Beyond the precariousness of the summer months, Lotilla emphasized that the LNG-fed plants will be beneficial in the massive scale integration of renewable energy (RE) that the DOE has been pushing in the country’s energy transition agenda.

“Natural gas will be able to support the intermittent renewable sources due to its ability to provide flexible capacity,” said the energy chief, adding further that “this flexibility allows LNG plants to serve not only peaking requirements to support renewables and ancillary power but can likewise provide mid-merit and base load requirements.”

The Philippine power sector is repeatedly distressed with strained power supply predicaments — that even after more than 20 years of implementation of the Electric Power Industry Reform Act (EPIRA), the DOE has yet to have a leader possessing both hindsight and foresight when it comes to ensuring the country’s energy security.

For the LNG sector, the energy department indicated that it already “put in place the regulatory framework and completed the downstream natural gas development plan to guide policymakers and stakeholders for the entry of LNG in the country.”