Greenfield power projects that will feed on imported liquefied natural gas (LNG) have been emerging as ‘hot investment contest’ in the restructured electricity sector, and Aboitiz Power Corporation announced that it is inclined to join the forthcoming wave of capital spending for the development of new gas plants in the country.
Aboitiz Power President and CEO Emmanuel V. Rubio told reporters in a virtual briefing that “we’re looking at gas,” and highlighting that it will be the company’s forward strategy in future installations to help meet the country’s need for base load power capacity.
“Since middle of last year, we saw that the trend in terms of forward curve for cost of gas has been getting to be more and more competitive,” he explained.
To firm up plans on gas-fired power investments, Rubio emphasized that the company “actually organized a team to look into gas as a serious option for our base load strategy.”
He asserted the Aboitiz group is amenable to the declaration of Energy Secretary Alfonso G. Cusi for the power sector to temporarily break off from coal-fired power investments – and such policy step of the government is also aligned with Aboitiz Power’s strategy to rebalance its portfolio for a 50:50 mix of thermal and clean energy technologies - a target it will work on for the next 10 years.
“Given that the Philippines will require base load capacity anywhere from 680 megawatts to 750MW year-on-year – yes, gas is part of our strategy moving forward,” Rubio stressed.
Aside from LNG-fired generating plants, the company will likewise be investing heavily on renewable energy (RE) projects; as well as on the deployment of energy storage technologies that would underpin the power system’s need for ancillary services.
In the company’s list of programmed RE projects are solar installations; wind generating facilities as well as run-of-river hydro developments.
“We have land bank, we have met masts for wind that are installed in three locations and we have a number of run-of-river hydros in the pipeline,” Rubio said.
He narrated that the company’s pilot floating solar project at its Magat hydropower facility in Isabela clinched technical feasibility and commercial fruition, hence, their joint venture firm SN Aboitiz Power Inc. (SNAP) had been given go-signal to proceed with the next stage of engaging full engineering design and to prepare a bid for engineering, procurement and construction (EPC) contract of a 67-megawatt floating solar farm venture.
“With regard to our 50-50 mix, we expect that with the implementation of RPS (Renewable Portfolio Standards) and because of the green energy auction pricing of the DOE (Department of Energy), we are now provided a venue where we can actually sell the capacity that we’ll be investing in terms of renewable energy,” the AP chief executive expounded.
Rubio qualified that demand for renewable energy – primarily the physical demand for capacity, will gain traction around 2025, that was instead of 2023 - because of the health crisis.
“The pandemic has lowered the demand a little bit and has delayed the need for physical capacity for renewable energy,” Rubio said.