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  • Writer's pictureBy The Financial District

Assessing LNG, Ammonia, Nuclear In PH Energy Mix

Aboitiz Power Corporation (AboitizPower) has underscored the importance of developing liquefied natural gas (LNG)-to-power projects in the country's transition to putting up baseload power plants as well as assessing decarbonization strategies for traditional power generation assets in the Philippines' energy mix and transition.

Photo Insert: As new technologies emerge to meet the country's energy needs, GNPower Dinginin 2 x 668 MW facility, a coal plant based in Mariveles, Bataan, will play a vital role in the Philippines' energy mix, ensuring stable baseload requirements until alternative solutions can take its place.

While renewable energy (RE) capacity is being added, AboitizPower has recognized the need for a balanced energy mix that can support the country's baseload electricity requirements citing LNG as a transition fuel to sustainable energy solutions for baseload power.

Felino M. Bernardo, the Chief Operating Officer of AboitizPower's Thermal Power Generation Group, said the entire power system needs to be considered, and a reliance on renewables or coal-fired power plants alone is insufficient.

“We have to consider the whole power system. Renewable is not going to do it alone. Coal-fired power plants cannot do it alone. LNG can be the transition fuel to support the demand for stable electricity, while society is still figuring out how to balance reliable, affordable, and sustainable energy solutions for baseload power,” Bernardo explained.

LNG can serve as a transition fuel to support stable electricity demand while society finds the right balance between reliable, affordable, and sustainable energy solutions for baseload power. It is considered a cleaner base-load fuel compared to coal, emitting 45% to 55% less greenhouse gas emissions.

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LNG complements RE power generation by providing flexibility through the ability to quickly adjust the quantity of electricity generated to accommodate the variability of certain RE sources. However, current market conditions have led to volatile LNG prices.

To achieve a balanced and sustainable national energy mix, AboitizPower is expanding its collaboration with JERA Co., Inc., Japan's largest generation company. They are assessing the feasibility of co-firing ammonia in coal plants and hydrogen in LNG facilities to reduce carbon emissions during thermal power generation.

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The aim is to start the feasibility study next year and obtain results within the decade. However, the cost of ammonia per metric ton is currently high, and the logistics network for ammonia needs strengthening.

Bernardo also stressed the importance of developing the necessary technology and supply chains before implementing co-firing in the Philippines. “We’re looking at having that [feasibility] study perhaps starting next year. Assuming everything goes well, our aim is to get [results] within the decade,” he said.

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Feasibility studies will take up most of the decade, and additional years will be required to secure investments and improve supply chains.

JERA is planning to conduct a 20% ammonia generation demonstration test this year in Japan, with the goal of increasing it to over 50% by 2028. AboitizPower is seeking financial support for its ammonia co-firing feasibility study from Japan's Ministry of Trade and Industry.

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Bernardo also discussed the potential role of small modular reactors (SMRs) in the country's transition to a cleaner energy mix. He believes that nuclear energy could be part of the Philippine energy mix but highlighted the need for careful planning and execution to ensure safety.

SMRs have the potential to be affordable, but it will take decades for costs and prices to decrease since nuclear technology is not as established as other traditional energy sources in the country.

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“I believe that [nuclear] could be part of the Philippine energy mix. It’s just a matter of time. What’s important is that we make sure that we have the capacity to plan and execute it in a safe way. Safety is number one as far as nuclear technology is concerned,” Bernardo added.

As the demand for electricity continues to grow, the Department of Energy has set a target to increase the share of RE in the country's power generation mix to 35% by 2030 and 50% by 2040, with the remainder allocated to thermal power plants.

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AboitizPower aims to expand its RE portfolio to 4,600 MW by 2030, achieving a 50:50 balance between RE and thermal capacities. The company currently has a pipeline of over 1,000 MW of RE projects, including wind and solar farms and geothermal development throughout the country.

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