Thermal power and transition from energy poverty to energy abundance

Today, I will attend the Amcham Philippines 9th Annual Energy Forum with a focus on energy recovery, resilience and transition. Lots of speakers led by Energy Secretary Sharon Garin, Sen. Erwin Tulfo and ERC chairman Nino Juan.

Energy recovery from high prices of oil, gas, fertilizers and various petrochem products is something that we hope once the Middle East conflict is resolved. Energy resilience is our preparation for the next round of turbulence when another big war comes that almost always involves current or future attack of oil-gas rich countries in the world.

The energy transition that we should aspire for is transition from energy poverty to energy abundance. Not transition from thermal and fossil fuels to intermittent renewables.The former is seeking resilience, the latter is seeking weakness.

With the mad and irrational aspirations for “net zero” and “ditch fossil fuel” narratives worldwide, the good news is that many companies and countries still keep their thermal energy – coal, gas, oil, plus nuclear.

Among the speakers in the Amcham forum later today are Don Paulino, who is with Aboitiz Power (AP) thermal business but his official position is AP’s chief of engineering and projects; Arnel Santos, president and CEO of Meralco PowerGen Corp. (MGEN) Thermal Energy Inc. and Jocot de Dios, president and CEO of Prime CoreGen. All good looking and rational business leaders who understand the necessity of keeping thermal power in the country.

Don Paulino is a regular speaker in the Amcham annual energy forum. I see his name in the last three years of the Amcham event.

At last year’s forum he correctly said that: “Conventional power provides the stability, flexibility and reliability that will allow emerging technologies and cleaner sources to scale. Without it, the transition risks being unbalanced and unable to meet the country’s growing demand.”

Arnel Santos is a hard-nosed thermal engineering guy, been with Shell oil-gas business for about three decades spanning work from the Philippines to Malaysia, Singapore, Netherlands, Canada, etc. I asked him about the country’s need for energy resilience and his company’s thermal business plan, he optimistically responded that:  “The Philippines needs substantially more energy to support industrialization, infrastructure development and rising living standards. A growing and increasingly diversified power system requires sufficient firm and dependable generation to support grid stability and provide reliable power around the clock. Thermal generation will continue to play an important role in meeting that requirement for many years.”

Arnel added: “MGEN Thermal’s planned expansion is anchored on this need, we intend to invest responsibly in reliable and efficient generation. Our role is to help build the dependable energy foundation needed to support the Philippines’ long-term economic and industrial development.”

Jocot de Dios was my co-author in a paper, “A Policy Brief on the Philippine Power Sector” launched during The Arangkada Philippines Project (TAPP) 2019 conference on Nov. 20, 2019 on the theme, “Turning on the TAP (Tourism, Agribusiness, Power).”

Jocot was the CEO of GE Philippines then and another co-author of our 39 page-long study  was Lorenz de la Cruz. The great John Forbes (RIP), senior advisor of Amcham Philippines, and his staff Sarah Gomez,  worked with the three of us in producing that paper.

I checked the energy mix of the largest economies in Asia and the world, data in terawatt-hours (TWH) from the Energy Institute, Statistical Review of World Energy 2026, percent share are my computations. Here are some interesting facts.

In 2015, total global power generation was 24,326 TWH, of which  China has 5,815 TWH or 24 percent of total; the US has  4,350 TWH or 18 percent of total. By 2025, total global generation was 32,202 TWh, of which China has 10,575 TWH or 33 percent of total, the US has 4,772 TWH or 18 percent of total.

The energy mix – coal as percent of total country generation in 2015: China 70, India 77, Indonesia 53, Taiwan 45, South Korea 42, Vietnam 35; Germany 42, US 34, world average 39.

In 2025, coal as percent of total country generation: China 54, India 71, Indonesia 61, Vietnam 48, Taiwan 35, South Korea, Japan 29; US 17, Germany 21, world average 33.

Gas as percent of total country production in 2015: Japan 40, Taiwan 31, Vietnam 30, Indonesia 23, South Korea 22; US 33, world average 23. Gas share in 2025: Taiwan 48, Japan 30, Indonesia 18; US 41, Germany 17, world average 22.

So, coal plus gas as percent of total country generation in 2015 and 2025: Taiwan 76 and 83, Indonesia 76 and 79, India 82 and 74, Japan 74 and 59, China 73 and 58, South Korea 64 and 58, Vietnam 65 and 54; US 67 and 58, Germany 52 and 37, world average 62 and 55.

These are big percentage share for thermal coal and gas, despite decades of anti-fossil fuel campaigns and narratives, good. Except in Germany where thermal power and nuclear  declines and intermittent solar-wind expands, and total generation declined from 649 to 508 TWH in 2015 to 2025. Same trend for the UK, total power generation declined from 339 to 291 TWH in 2015 to 2025.

Germany and UK do not experience regular blackout yet because of electricity imports especially from France which until 2025 is 68 percent nuclear-powered.

More thermal power for the Philippines is good for both generation and transmission. The NGCP will require less ancillary services (AS) like BESS and pumped hydro storage to stabilize the grid as more solar-wind are added, which leads to additional AS charge in the transmission charge in our monthly electricity bill. The NGCP does not earn from the AS charge but it must contract this additional service and cost.

Energy abundance, not energy poverty despite rising share of RE. This is the goal we should aspire for.