Energy Security

AboitizPower says economies of scale benefit baseload construction, energy security

September 10, 2024

Planning the Philippines’ long-term baseload electricity requirements and capitalizing on economies of scale eases some pressures on costs and energy security, said Aboitiz Power Corporation (AboitizPower), one of the largest power producers in the country.

“I think the Philippines would really need to look at it in [terms of] ‘how much megawatts do I really need and what sort of portfolio do I need as I move along’ because, from a value chain perspective, there are economies of scale in building power plants,” said AboitizPower Thermal Group Chief Engineering and Projects Officer Don Paulino during the 7th Annual Energy Forum hosted by the American Chamber of Commerce of the Philippines.

The AboitizPower executive explained that power producers leverage planning and economies of scale to gain efficiencies, maximize value and supply chains, and drive down the costs of building baseload power plants like coal or even nuclear.

“In AboitizPower, we want to help enable the renewable sector to grow, and that’s why we’re aiming for 50% of our portfolio to be renewable,” Paulino shared. “But also what we believe in is that we want a stable, affordable, and sustainable baseload, which can support the intermittency of our renewable sector.”

According to the Philippine Energy Plan 2023-2050, peak electricity demand will grow by 5.19% and nationwide electricity sales will expand by 5.49% every year until 2050.

The Philippine Department of Energy put out a strategic framework that targets to increase the share of renewable energy to more than 50% in the power generation mix by 2050; increase port infrastructures to support the development of offshore wind projects; and integrate 1,200 megawatts of nuclear capacity by 2032 and further to 4,800 megawatts by 2050.

Recently, liquified natural gas is also being considered as a flexible fuel that will address the intermittency of variable renewable energy sources and support grid stability.

“From a Philippine perspective, we need to look at it more holistically. We need to make sure that the current baseload that we have is running efficiently. It’s about optimizing the current capability so that we can have stable power whilst waiting for the newer technologies,” Paulino added.

AboitizPower is one of the largest power producers in the Philippines, with a balanced portfolio of assets located across the country. It is a major producer of renewable energy, with several hydroelectric, geothermal, and solar power generation facilities. It also has thermal power plants in its generation portfolio to support the country’s baseload and peak energy demands.

The Company has over 1,000 megawatts of disclosed energy projects in solar, hydro, geothermal, wind, and energy storage systems en route to expanding its renewable energy portfolio to at least 4,600 megawatts.