Interview: Dennis A Uy
How would you assess the environmental impact of the energy mix in the Philippines, and to what extent does it meet domestic demand?
DENNIS A UY: Sustainability, environmental impact, operational economics and a clear understanding of each energy source must be taken into consideration when planning the energy mix. In the worldwide pivot towards cleaner sources of energy, LNG has the potential to play an important role in evolving the energy landscape of the Philippines. According to statistics from the Department of Energy, more than 50% of power currently generated in the country relies on coal- and oil-based resources. This dependence on conventional resources jeopardises our ability to meet increasing energy demands in volatile markets.
There are growing levels of investment in renewable sources like solar and wind, but LNG-fired plants are more efficient, flexible and quick-starting, providing much-needed stability and responsiveness in our power grid. At present, all types of natural gas together account for only about 15% of our energy mix, so this source is far from being maximised. Indeed, a number of enterprises have taken concrete steps to support LNG’s place in the diversification of the energy mix.
What risk factors are posed by relying on the import of oil and coal, and how can these be mitigated?
UY: Considering the increasing demand associated with the upward trajectory of the developing economy, energy security has never been a more pressing concern than it is now. In addition to environmental issues, there are several risk factors associated with importing oil and coal. For example, current geopolitical developments have created an unpredictable oil market, illustrating the dangers of over-dependence on conventional fuels. These are traditionally sourced from the Middle East, and in instances when the supply chain is disrupted, for geopolitical reasons or otherwise, the Philippines could be left with inadequate supply and skyrocketing prices. Natural gas, however, is abundant in many countries and regions across the world, notably the US, Russia, Africa, Oceania and South-east Asia. Having access to multiple sources allows us to enjoy the security of a steady supply even if one or more of them should become unavailable. This kind of sustainability has attracted many nations to LNG. It is also a convenient alternative to the Malampaya gas field, as supply from this source is declining. It is clear that the Philippines needs to recalibrate its energy mix.
The goal is to shift towards a more balanced mix that can meet growing demand while taking into account the capacity of the global supply chain. The country is still far from achieving such a balance, but there exists the potential to make substantial changes that will move us closer to a more sustainable future.
To what degree could LNG help to enhance the cost-efficiency of electricity generators and thereby reduce the country’s energy bill?
UY: In terms of costs and operations, LNG is an attractive alternative source of energy. It is a game-changer in terms of efficiency of transport. The liquefaction process reduces natural gas to as much as 1/600th of its original volume, and almost half the density of water – a significant advantage for transportation. It brings us closer to being able to provide a reliable and continuous power supply to the whole archipelago.
In terms of industry, natural gas is also the prevalent fuel used in the manufacturing sector, which is responsible for producing those items that are fundamental to successful societies and economies, from metal and paper to glass and clothing. Manufacturing also produces the raw materials needed for products such as paints, dyes and plastics. Indeed, LNG has proven to be a viable energy source for a host of various industries around the world. The development of reliable and inexpensive LNG power generation will therefore be beneficial for both families and industry overall.
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