Emerging Asian markets, including the Philippines, will continue to drive gas-to-power demand until 2033 as power sectors are seen to remain “carbon-intensive” amid rising demand, according to an international think tank.
BMI, a unit of the Fitch Group, said in a report that Asian countries were expected to see strong growth in liquefied natural gas (LNG), with Philippine LNG imports projected to surge by 280 percent over the next nine years.
“This is primarily driven by the dominant role of conventional thermal power, which is set to remain the region’s largest power source over the next decade,” BMI said.
While the Philippine government has reiterated its goal of increasing the share of renewables in the energy mix, the Department of Energy has also reiterated that LNG—a fossil fuel—was crucial for the energy transition.
Currently, gas-fired power plants supply a fifth of the country’s power needs.
According to BMI, the Philippines will import around 12 billion cubic meters by the end of the decade.
“This is quadruple the 3 billion cubic meters imported last year, due mainly to an increase in demand in the energy sector, as gas use in the industrial, commercial and transportation sectors remained “very weak,” BMI added.
Globally, LNG-based power generation is expected to increase to 7,786 terawatt-hours (TWh) in 2033 from 6,563 TWh last year to meet growing demand from emerging markets.
Gas-based power output in emerging markets in Asia is also seen to grow by 39 percent.
However, BMI pointed out in a separate report that while the Philippine LNG market was set for “strong growth,” its capacity to import supply may be marred by “the buyers’ ability to pay.”
This could expose consumers to the highly volatile spot market, BMI said.
“Currently, none of the potential LNG consumers in Vietnam and the Philippines has signed long-term sale and purchase agreements with LNG producers and traders, making them entirely exposed to the LNG spot market,” it added.
The International Energy Agency previously warned that global gas supply would again be tight in 2024 due to a “limited increase” in output, adding that new capacities would only come online after this year. —Meg J. Adonis INQ