Gas power in Asia and Pacific Light (Part 1 of 2)

SINGAPORE – It’s the city of bright lights, fast and efficient trains underground, the regional headquarter of many big multinationals from the West and the host of one of Formula 1’s famous races held at night because it can afford to brighten the road tracks as if it is daytime.

Singapore is the richest Asian country in terms of per capita income. In 2023, Singapore has a per capita GDP at current prices of $84,734, fifth highest in the world behind Luxembourg, Ireland, Switzerland and Norway. But at per capita GDP at purchasing power parity (PPP) values, Singapore is the second highest at $127,544 just behind Luxembourg’s $133,973.

The per capita GDP at PPP values of other East Asians in 2023 were: Taiwan $67,044, Hong Kong $64,538, South Korea $54,103, Japan $54,103, Malaysia $34,864, China $22,078, Thailand $21,608, Indonesia $14,014, Vietnam $13,499 and the Philippines $10,165 (Source: IMF, World Economic Outlook database Oct. 2024).

One wonders what powers or what sustains the heavy use of electricity in Singapore. Well, in 2023, Singapore was the most natural-gas intensive country in the world. Here is the percentage share of natural gas in total power generation in terawatt-hours: Singapore used about 90 percent of 57 TWH, Iran used 84 percent of 383 TWH and Egypt used 81 percent of 220 TWH.

Other Asians have these numbers: Thailand with 68 percent of 190 TWH, Taiwan with 40 percent of 282 TWH, Malaysia with 37 percent of 188 TWH, Japan with 32 percent of 1,013 TWH, S. Korea with 27 percent of 618 TWH, Indonesia with 17 percent of 351 TWH, Philippines with 14 percent of 118 TWH (Source: Energy Institute, 2024).

So many Asians have high use of natural gas which contributes to their high power generation, which in turn, contributes to their high GDP size and/or high per capita GDP. It is an energy source that we should keep expanding in the Philippines.

There are five existing natural gas plants in the country, all located in Batangas, the biggest of which is the Ilijan plant with installed capacity of 1,436 MW and dependable capacity of 1,200 MW. It has been running since 2002, making it 22 years old already. It is owned by San Miguel Global Power (SMGP) but Chromite Gas Holdings Inc. (CGHI) where Aboitiz Power (AP) and Meralco Power Gen Corp. (MGen) are also co-investors with SMGP in Ilijan.

There are three other gas plants under construction. The biggest of which is the Excellent Energy Resources Inc. (EERI) in Batangas with 1,760 MW capacity (440 MW x 4 units), followed by Batangas Clean Energy Inc. with 1,100 MW and Energy World Corp. with 650 MW in Pagbilao, Quezon. EERI is also owned by SMGP but CGHI will later own and operate this, meaning it will be a partnership among SMGP, AP and MGen. The deal is still pending approval with the Philippine Competition Commission.

Now MGen also co-owns a gas plant in Singapore, Pacific Light Power (PLP). It is 830 MW (415 MW x 2 units) running on liquified natural gas (LNG) but capable of running on diesel as well, operational since 2013. MGen has 58 percent ownership with partner First Pacific Co. Ltd (HK) owning 42 percent. It is one of six generation companies in Singapore, located in Jurong Island, an industrial and energy enclave of the country.

In a press statement, Yari Miralao, president & CEO of MGen Gas Energy Holdings Inc. (MNatural Gas) said that “we are dedicated to investing in state-of-the-art facilities to enhance our competitiveness in the Singapore energy market. This includes a potential investment in a new 600- MW power plant, designed to be larger, more efficient and one of the most reliable on the Singapore grid.”

I find PLP interesting for four reasons. First, it occupies a small land area with only 13 hectares housing an 830-MW gas plant and will further expand to another 100 MW of fast-start LNG and hydrogen-ready ancillary service or peaking plant.

Second, it is competitively priced. It has about eight percent of installed capacity but gets about 10 percent of market share.

Third, it is the first power plant in Singapore to exceed 60 percent efficiency after the Advanced Turbine Energy Package upgrade, making it one of the most efficient gas plants in East Asia.

Fourth, it has a safe work environment with over one million man-hours without lost time injury and 1,000+ accident-free days as of October 2024.

Singapore recently solicited a supply of two new plants. PLP submitted its bid to build another gas plant with a capacity of 600 MW. The average cost of building a gas plant is $1.5 million per MW so this will cost around $900 million. See this story in PhilStar, “MGen’s PacificLight allots $900 million, to bid for 600-MW Singapore plant” by Brix Lelis (Nov. 27).

During the global lockdowns in 2020, Singapore suffered a 3.9 percent GDP contraction (or “negative growth”) but recovered with a 9.7 percent GDP growth in 2021. The Philippines suffered a much worse 9.5 percent contraction in 2020 and only recovered to a 5.7 percent growth in 2021.

Being a major exporter in the world with merchandise exports of $391 billion in 2019, $457 billion in 2021 and $476 billion in 2023, and further moving into high-end electronics exports, Singapore will need more electricity supply yearly. PLP expansion will help address this rising power demand while providing additional knowledge to MGen for the operation of the big EERI gas plant.