HOUSTON – Japanese firm JERA Co. Inc. has flexed to global energy players and policymakers the ‘portfolio balancing strategy’ of its Philippine partner Aboitiz Power Corporation as the ‘sweet spot’ to their successful business marriage.

At the ongoing CERAWeek conference, Aboitiz Power was specifically mentioned by JERA Global CEO and Chairman Yukio Kani as a ‘model’ business partnership they have entered into in the Asian market, because both parties agreed and fully understood each other on how they will navigate the very delicate balancing act to be pursued in the flourishing ‘energy transition’ of markets and economies.

In a plenary session at the CERAWeek attended by roughly 8,000 delegates from all over the world, JERA Global CEO and Chair Yukio Kani shared the story of their company's partnership with the Aboitiz Group and how both companies have been approaching the 'energy transition' investment narrative. 

Kani said the integration of liquefied natural gas (LNG) and renewables into Aboitiz Power’s generation portfolio balancing has been a major turning point on JERA’s decision to cement partnership with the Filipino company.

“We have been doing a lot of business in the US and also in Asia. We invest in one of the top companies in the Philippines - Aboitiz, we have 27% stake. Before injecting equity, we have serious discussion with the top management. They said that they are going to build new coal plants, and we said no, don’t do it, otherwise, we cannot inject equity,” he narrated.

The inflection point in the negotiations, he noted, was when “they (Aboitiz Group) finally agreed to inject LNG and renewables in a balanced way and they hope that we can provide ammonia solution to them.”

He qualified that the business tie-up forged by JERA with Aboitiz Power certainly goes beyond handshake, it entails shared goals and deep understanding of the responsible and realistic investment trajectory that they will jointly work on for the long term.

As a mammoth energy player in Japan, Kani acknowledged that JERA has major responsibility on the decarbonization pathway that its home-country had committed, but he qualified that they are approaching that journey by embracing tangible and pragmatic solutions.

JERA’s approach, he conveyed, is a two-part strategy: the first is a perceptive response to the intensifying call for massive scale renewable energy (RE) investments but keeping in mind the ‘intermittency’ dilemma of such technology deployment; while the second one is combination of RE and LNG technologies; with an ultimate goal to eventually decarbonize also the LNG value chain.

Onward, Kani emphasized that innovations will also play a key role in ramping up the ‘package of solutions’ for decarbonization – including those on energy storage systems, flurry of RE investments – including solar and wind farm installations; rollout of blue or green ammonia; as well as blue or green hydrogen.

“We are now standing on some kind of a crossroad – one part is to jump into innovative energy solution including renewables but intermittent; and the other part is to try to introduce gas together with renewables -- and after that, decarbonize LNG or gas. If we will just take the first part, there’s a slim chance to solve the energy security issue with intermittent renewables,” he stressed.

The JERA chief executive primarily lamented that “some people say, let’s divest the coal assets, but that doesn’t solve anything,” as he asserted that “renewables cannot scale up fast enough at affordable cost -- which means in next 5-10 years, we should do everything we can do to try to come up with new supply options.”

He added “one of our solutions is to create ammonia value chain -- to put blue ammonia in one of our coal-fired power plant. We start injecting blue ammonia starting 2027 – at 1.5 to 2.0 million tonnes. We already started testing at the plant; and we will complete testing in a couple of months.”

Corollary to that, Kani shared the company’s plan to “order 5 to 6 large scale ammonia vessels,” while also working on a prospective deal for upstream ammonia projects in the United States.

In sorting out the package of solutions, he specified that it is also very important for industry players to offer services that will “best fit each customer” – especially the power intensive end-users that have been redefining economic activities and industrial transformations.

In the flourishing landscape of new-fashioned investments, he stated that data centers and semiconductor manufacturing facilities will be the ‘hungry caterpillars’ that shall be keeping industry players awake at night when it comes to satisfying the prodigious need for energy of these customers.