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Why natural gas makes sense
for PH economy

As the Philippines looks to diversify its energy mix, one source - natural gas - has become increasingly important.

Natural gas is a clean, affordable, and reliable energy source largely used for electricity
generation. There are 5 natural gas plants producing electricity in the country.

In 2017, these plants provided 21.8 percent of the country's total power demand
They also accounted for 30 percent of power in the main region of Luzon.

Source: Department of Energy 2017 Power Statistics

Because natural gas is cheap, homes and businesses powered by it increase their productivity and save on costs.

In fact, in 2017, it had the lowest generation charge compared to other sources contracted with Meralco.

That's because the generation charge - or the cost of producing electricity - has dropped for natural gas. Since the generation charge makes up around 50 percent of consumers' electricity bills, a lower generation charge means lower electricity bills.

Over the past few years, the generation charge of natural gas has been cheaper than oil and coal plants contracted with Meralco.

Globally, the price of coal is also on the rise, which increases the price of coal-based electricity

Hence, natural gas makes sense for the country - actually
way more if you factor in social costs.

Hover and click on the images to learn more.

These social costs, combined, make coal far more expensive than natural gas.

One more thing that makes natural gas plants more economical is how efficient they are.

Compared to coal plants, natural gas technology is more efficient, allowing it to generate more electricity with the same amount of fuel and reducing costs.

Natural gas also ensures stable electricity supply, helping avoid brownouts that stall economic activity.

Harsh weather, events that interrupt the power grid, and the intermittent availability of some technologies can result in power outages. That's why we need plants that can react quickly to these changes to balance supply.

Compared to other plants, natural gas plants are flexible and reliable. They can quickly start up and generate electricity almost on-demand and at economical prices. Because of this, we can rely on natural gas plants to rapidly adjust to the needs of the grid, and generate electricity when required.

Why is this crucial for the economy? Each part of the day would have different energy requirements as demand from households and businesses changes throughout.

Demand is usually low during wee hours then picks up at mid-morning to mid-evening when there's lots of economic activity.

Natural gas plants are designed to provide cost-competitive power at any time of the day and depending on the demand. Plants like coal, which operate at the same output all day, lack that flexibility.

San Gabriel

  • Very competitive at both mid-merit and baseload periods

  • Turns on daily as needed to provide affordable electricity when it's required

  • Most efficient natural gas plant in Southeast Asia, at ISO (International Organization for Standardization) conditions

Avion

  • Delivers electricity when there's peak demand

  • Equipped with fast-start technology, reaches full load in under 15 minutes

  • Can offer up to half the prices of the other peaking plants

*Baseload plants are used to meet an area’s minimum level of energy demand all day and produce energy at a constant rate, while mid-merit plants are needed at periods of high demand. Peaking plants, which are capable of turning on and off multiple times a day, are used during “spikes” or when demand for electricity is extremely high.

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