Tycoons join race for 1st gas auction

MANILA, Philippines — Tycoons Manuel V. Pangilinan, Enrique Razon Jr., Sabin Aboitiz and Ramon Ang are throwing their energy firms into the race for the country’s first mid-merit natural gas auction.

The Department of Energy (DOE) has named 10 pre-qualified bidders offering 14 projects for the auction, which seeks to attract 3,800 megawatts (MW) of gas capacity.

Among the companies that hurdled the pre-qualification stage are Razon-led First Natgas Power Corp., First Gen Ecopower Solutions Inc., First Gas Power Corp. and FGP Corp.

The companies, previously controlled by the Lopez Group, own and operate four gas-fired power plants totaling 2,520 MW in Batangas.

Also on the list is Excellent Energy Resources Corp. (EERI), which has submitted two projects in the Visayas and another in Batangas.

EERI is owned by LNGPH, the multibillion-dollar liquefied natural gas venture of Pangilinan, Aboitiz and Ang.

Completing the list of pre-qualified bidders are Panasia Energy Inc., Therma Cebu Gas-to-Power Inc., Cordova Power Generation Corp., Quezon Power Inc. and Vires Energy Corp.

The DOE is pursuing the gas auction to encourage additional mid-merit capacity to help meet the country’s growing energy demand.

Mid-merit plants play a vital role in keeping the power grid stable by bridging the gap between always-on baseload generation and peak-demand sources. These facilities can quickly adjust output in response to demand fluctuations.

The growing penetration of variable renewable energy sources also underscores the need to strategically procure flexible mid-merit capacity to manage intermittency and maintain grid reliability.

For this auction, the virtual pre-bid conference is tentatively scheduled on Oct. 27, subject to the issuance of the gas auction threshold price or the maximum offer price.

At the Philippine Energy Investment Forum yesterday, Energy Secretary Sharon Garin said the mid-merit gas auction is expected to support a more diversified power generation mix. Currently, natural gas accounts for around 14 percent of the country’s energy mix.