Sustainability think tank doubts viability of LNG

MANILA, Philippines — Sustainability think tank Center for Energy, Ecology, and Development (CEED) has questioned the viability of the Philippines’ push for liquefied natural gas (LNG) as a solution for the country’s current power woes.

In a statement, CEED executive director Gerry Arances said LNG carries more problems than solutions for the power cost and security issues which the country currently confront.

“It makes no sense for the Philippines to entertain an energy development pathway that places LNG front and center,” Arances said.

“Global LNG supply remains tight and volatile a year since the Russia-Ukraine war began, and long-term contracts for LNG supply have already been sold out for the next couple of years,” he said.

However, even if energy companies in the Philippines get hold of supply, Arances warned that LNG prices would become prohibitive.

Arances cited an analysis published by the Institute for Energy Economics and Financial Analysis, which estimates that rates from LNG-fired power generation in the Philippines could be roughly P9 per kilowatt hour (kWh) to as much as P16 per kWh.

“LNG is coming in just as ongoing procurement talks allow generation companies to dictate the prices of electricity and pass on additional costs to consumers with reckless abandon,” he said.

“LNG would be one source of electricity, but what is the point when it is too expensive for ordinary Filipinos? We don’t want to live in darkness, but having expensive electricity will be as bad as having no electricity since people can’t turn on their lights anyway,” Arances said.

AG&P has announced that it has received the country’s first LNG cargo at its import terminal in Batangas City, which will then be regasified and used to fuel adjacent gas power plants.

AG&P’s LNG import terminal is one of the seven LNG terminal projects approved by the Department of Energy.

The other projects are that of FGEN LNG Corp., Energy World Gas Operations Philippines Inc., Excelerate Energy L.P., Vires Energy Corp., Shell Energy Philippines Inc., and Samat LNG Corp.

For Arances, there is an alternative energy source for the country which does not have the drawbacks associated with LNG and other fossil fuels.

“Renewable energy is affordable and readily available in the country, on top of being more environment-friendly. Biddings under the Green Energy Auction Program (GEAP) resulted in prices as low as P3.40 per kWh in 2022,” Arances said.

“A new round of auctions in June would soon allow over 11,600 MW of new renewable energy capacity to come online in the next few years. This casts doubt on the wisdom of getting into a future where we would keep wondering where the next shipment would come from, or how much consumers’ pockets will be emptied by volatile prices, when we have an abundance of cheap energy from renewables just within reach,” he said.