The Philippines is unlikely to commission new liquefied natural gas (LNG) plants until 2030 as global gas turbine shortages cripple the buildout, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
The IEEFA warned that turbine bottlenecks could intensify delays and skyrocket costs for new gas-fired power projects in the Philippines, with developers scrambling to secure orders.
‘The Philippines has one LNG-to-power project expected to begin fully operating in 2025 but is unlikely to bring another LNG-fired power plant online this decade,’ the think tank said in a report released yesterday.
This refers to the 1,275-megawatt Excellent Energy Resources Inc. in Batangas owned by tycoons Manuel V. Pangilinan, Ramon Ang and Sabin Aboitiz. A 432-MW expansion is in the pipeline.
Amid turbine production backlogs, the country is facing potential delays to proposed LNG projects totaling 10.7 gigawatts (GW), all of which remain in the early stages of development, the IEEFA said.
‘Relying on alternative suppliers is challenging given the limited number of established heavy-duty gas turbine producers and the complexity of turbine systems, contracts and procedures,’ said Sam Reynolds, LNG/gas research lead at IEEFA Asia.
According to the report, a surge in turbine orders from the United States and the Middle East, coupled with supply chain constraints, has triggered a global shortage.
In the US alone, around 19 GW of gas-fired power projects are expected to be developed annually through 2030, the IEEFA said.
Given this, the IEEFA expects emerging Asian economies like the Philippines to accelerate investments in renewable energy and battery storage for grid balancing.
‘Every year of delays for gas and LNG-fired power plants means that less gas and LNG will be needed in the long run,’ Reynolds said.
In the Philippines, the Department of Energy has positioned LNG as a transition fuel to shift away from coal-fired facilities while paving the way for wider adoption of renewables in the long term.
Latest DOE data showed that natural gas accounted for around 14 percent of the country’s power mix, with coal and renewables making up 63 percent and 22 percent, respectively.
Under the Philippine Energy Plan, an additional 3.98 million tons per annum of LNG facilities are needed to meet the forecasted natural gas supply requirements by 2050.