To learn more about decarbonisation of power generation in the Philippines – and why gas is not seen as a likely option for the country’s future energy mix – Pamela Largue gained exclusive insights from Frank Thiel, managing director of Quezon Power.

According to Thiel, the Philippines’ Department of Energy Energy Plan for 2025-2050 focuses less on gas assets and more on renewables, coal and nuclear to drive energy transition.

Fewer new gas assets are expected to come into the energy mix because of the limited resources available in the country, says Thiel, adding that there is only one major producing field, Malampaya, and its production is already dwindling.

Would you say gas will play a role in the Philippines’ energy mix?

Although natural gas is touted as the ‘transition fuel’, it is unlikely to be so in the Philippines as its cost makes it difficult to market. We are seeing instead more coal coming into the mix.

At Quezon Power we evaluated ammonia co-firing as a possible way to reduce emissions. The study, however, pointed out several problems such as very high cost, limited sourcing, as well as safety concerns. We have opted not to consider this further.

We also explored biomass co-firing. The main problem there was sourcing with insufficient biomass of the quality needed to avoid boiler problems. Also, we did a study to convert from coal to gas. Then again, the cost of the fuel made this option unworkable.

We have opted instead to focus on improving the plant’s efficiency.

What are the two biggest challenges facing new gas projects?

Finding long term contracts to sustain project development is a challenge. Offtake contracts can be secured through a competitive selection process, but this is highly regulated. There are very limited opportunities to contract otherwise.

Also, the country’s current deregulated market is simply not suitable to justify new gas entrants.

Another key factor is that financing is not available for merchant type of plants.

Cost is a major challenge. Potential offtakers require the absolute lowest cost of power to be provided. This is a regulatory matter as well. Add to this significant environmental pushback, and a very convoluted permitting process and the result: few new gas projects.

Learn more from Frank Thiel at Enlit Asia, 9-11 September in Bangkok, Thailand, as he shares his insights in a topical panel discussion: Advancing power plant efficiency for a realistic energy transition generation

Could hydrogen be a factor in increasing the use of gas?

Hydrogen-ready technologies are just that: ready. But cost and supply are proving to be key bottlenecks. There is not ready supply of hydrogen in-country for power, or for blending with the indigenous gas.

Ammonia co-firing faces the same challenges: sourcing, transportation, and regassification are simply too expensive and the current power tariffs do not consider these costs.

One possible opportunity for increasing the use of gas, and potentially blending hydrogen, lies with the possible development of pipelines to supply anchor plants.

Currently, however, there are no gas pipelines in the country other than the few around the Malampaya gas field. Gas use could increase significantly if there was a pipeline network.