The Department of Energy (DOE) is calling for fair treatment of liquefied natural gas (LNG) plants by the Energy Regulatory Commission (ERC) and other relevant entities.
Energy Secretary Raphael Lotilla emphasized the need for transparent and non-discriminatory practices in the allocation and pass-through of bulk purchase costs associated with LNG as fuel for power generation.
According to the DOE, LNG differs from indigenous natural gas like the Malampaya field in terms of source, pricing, and delivery process. While Malampaya gas is transported to power plants through a production platform and pipeline, LNG is imported, transported via LNG carriers, regasified at storage terminals, and then delivered to power plants.
Given these differences, the DOE acknowledged that there are significant variations in technology and cost components, including capital and operating costs.
The DOE has directed the ERC, market operators, system operators, and the Wholesale Electricity Spot Market (WESM) governance arm to ensure a level playing field for all LNG-fired power plants and players in accordance with relevant guidelines.
Major power developers such as First Gen Corp. of the Lopez Group, San Miguel Corp., and Meralco PowerGen Corp. are currently pursuing the construction of LNG power plants.
The Philippine Energy Plan 2020-2040 recognizes the need to source natural gas from external markets due to the depleting supply of indigenous natural gas. This is intended to address the increasing demand for electricity while ensuring the continued operation of existing natural gas-fired power plants and the entry of new ones in the country.