On gas power, Pacific Light, and coal
SINGAPORE — This small but very rich country is known for its bright lights at night, and huge indoor gardens and tall waterfalls featuring 24/7 lights and aircon like those at the Gardens by the Bay and the Jewell Changi airport, among others. The city-state has huge power generation per capita, about 10 times that of the Philippines.
Singapore is the most natural gas-intensive country in the world, with about 90% of its total power generated in liquified natural gas (LNG) plants, and another 10% generated from diesel. It has no coal or nuclear plants, no solar or wind farms. It is pure 100% fossil fuel power generation with competitive prices. It does not suffer from blackouts or power fluctuations.
Some Middle East Asia and North Africa countries — like Iran, Egypt, and the United Arab Emirates (UAE) — have gas to total generation shares of above 70%. In Asia, Thailand, and Taiwan follow Singapore in having high gas/total generation ratios (see Table 1).
Pacific Light Power (PLP) is one of the six generation companies (gencos) in Singapore that contribute to the country’s bright lights. It is the smallest among the six, with only about an 8% share of installed capacity, but it has a 10% consumer market share, meaning it is efficient and has competitive prices. It is jointly owned by Meralco Power Gen Corp. (MGen) with 58% share and First Pacific Co. Ltd. with 42%.
Singapore has no mandatory competitive selection process (CSP) — long-term supply contracts between gencos and consumers. Singapore’s retail competition and open access (RCOA) style service goes down to the household level, so households can choose their gencos for a contract of at least one year. With consumers’ ability to switch from one genco to another, each genco must be as price competitive as possible. And PLP is exactly doing that.
THE PHILIPPINE SITUATION
The Philippines has five gas plants that use either indigenous Malampaya natural gas or imported LNG. These gas plants supply between 14% to 16% of the total power generation yearly.
MGen is a potentially big player in the Philippines’ gas development, not only for its knowledge about gas power through PLP, but also through Chromite Holdings that will (hopefully) own two huge gas plants — Ilijan and Excellent Energy (EERI) — in a partnership between San Miguel Corp., Aboitiz Power, and MGen. The partnership is still subject to approval by the Philippine Competition Commission though.
Coal plants are the workhorses of the Philippines, they contribute between 60-62% of total power generation yearly. This ratio is similar to that of China, Indonesia, and Vietnam but lower than India’s 75%.
The average marginal increase in the Philippines’ power generation from 2019 to 2023 was about six terawatt-hours (TWh) a year. If the Philippines is to sustain an annual GDP growth of 6%, compounded, and avoid the frequent yellow-red alerts (low power) that we experienced until early this year, I estimate that we will need about seven to eight TWh/year from 2024-2026, then eight to 10 TWh/year from 2027-2032.
To achieve this, we will need new conventional power plants with a combined dependable capacity of 1,000 megawatts (MW) yearly. Since these are new, their projected capacity is up to 90%. To compute the potential output of a 1,000 MW conventional plant, we use this formula: (1,000 MW) x (0.90) x (24 hours/day) x (365 days/year) = 7.88 TWH/year
And to achieve this, gas, coal, or nuclear plants must be commissioned every year from 2028 onwards, and construction should start this year, not two or three years from now.
In the experience of many countries, those that shifted away from using coal experienced higher or flat inflation rates — Australia, Canada, Germany, the UK, and the US. Meanwhile, countries that increased their coal use experienced lower inflation rates — Taiwan, China, South Korea, Japan, India, Indonesia, Malaysia, the Philippines, Vietnam, Russia, and Turkey (see Table 2).
The numbers on total coal generation, population, and derivation of coal generation per capita were shown in this column’s previous article, “The Atimonan coal project, energy transition, and the ERC” (Sept. 19).
Despite the increase in the Philippines’ coal power capacity, our per capita coal generation remains the lowest in our neighborhood — it is, for instance, only one-half of Vietnam’s and only one-fourth of that of Malaysia.
We should not accede to the lobbying for the early shutdown of our coal plants unless there are huge gas or nuclear plants ready. If we do, we should be prepared for daily blackouts again like in 1990 and 1991.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.
