Integrated LNG facility deal to help keep the lights on - AboitizPower CEO

Bringing its operational expertise and decades of excellent performance, Aboitiz Power Corporation (AboitizPower) is an investor in the Philippines’ largest integrated liquified natural gas (LNG) facility along with Meralco PowerGen Corporation and San Miguel Global Power Holdings Corporation.

In a landmark deal, AboitizPower acquired a minority stake in the integrated LNG facility in Batangas, which is set to eventually deliver 2,500+ megawatts from a new 1,320 megawatt combined cycle power facility and the Ilijan Power Station, which has a nameplate capacity of 1,200 megawatts and historically accounts for 10-12% of Luzon’s net dependable power.

“We are pleased to continue to diversify our generation portfolio and increase our capability in the delivery of energy security in the Philippines through a minority share in the first integrated LNG facility in the country. Its importance in keeping the lights on cannot be understated,” said AboitizPower President and CEO Emannuel Rubio.

“In an energy transition characterized mostly by the influx of variable renewable energy, the inclusion of LNG plants supports our pragmatic approach. As a transition fuel, LNG will complement the variabilities of solar and wind power generation, helping maintain the stability of the aggregate supply and the whole power system,” he added.

Gas-to-power generation is considered a natural complement to variable renewable energy, especially if the aim is to maintain grid stability and strengthen energy security. LNG-powered turbines are able to quickly ramp up or down the quantity of its generated electricity to complement the inherent intermittencies of renewable energy.

Under the Clean Energy Scenario of the Philippine Energy Plan, it was forecasted that 50% of gross generation will come from renewable energy sources while 26% will be from LNG by 2040.

“In that sense, this investment will support AboitizPower’s growth strategy of adding 3,700 megawatts of new renewable energy capacity on the way to a balanced portfolio of 4,600 megawatts each between its thermal and renewable assets,” Rubio said.

The natural gas-to-power facility will also help support and sustain economic growth in the country as it needs stable and reliable electricity. A capacity of 2,500+ megawatts will be critical since, according to the Department of Energy, peak demand is projected to increase annually by 6.6% from 2020 to 2040.

Stable and reliable electricity will encourage new investments and will help sustain existing ones. As it stands, the Philippines’ electricity generation per capita is the lowest in the Association of Southeast Asian Nations or ASEAN.

In the near to medium term, the national government has set economic growth targets of 6.5-7.5% for 2024 and 6.5-8% for 2025 to 2028.