MANILA, Philippines — The Department of Energy (DOE) has announced plans to launch a competitive bidding process for mid-merit natural gas capacity. The move aims to stabilize the national power grid and facilitate the country’s transition toward cleaner energy.
The DOE’s decision follows a study of the daily load profiles from 2023 to 2025, which revealed significant “system flexibility constraints” across the country’s main grids:
- Luzon: Currently, coal-fired power plants are being forced to run at their maximum operating limits due to a lack of natural gas facilities. This overstressing makes coal plants vulnerable to forced outages and blackouts.
- Visayas & Mindanao: These regions currently have no natural gas-fired generation and rely entirely on coal and oil-based power for their mid-merit needs.
Mid-merit power plants are designed to fill the gap when electricity demand rises above the “base load” (the minimum constant demand) but hasn’t yet reached “peak” levels.
- The Role of Natural Gas: Natural gas is considered the ideal “transition fuel” because gas plants can be powered up and down more quickly than coal plants, making them perfect for balancing the grid as more fluctuating renewable energy (like solar and wind) is added.
The DOE’s draft circular emphasizes that an auction is “necessary” to ensure system reliability and meet the projected rise in electricity demand. The bidding will prioritize additional natural gas capacities that can support grid flexibility and improve overall dispatch efficiency.
