The development of the Philippines' natural gas power generation facilities is vital for the country's transition to renewable energy, according to the Department of Energy (DOE).

The agency said flexible power plants, such as the availability of natural gas-fueled power facilities, are crucial in attaining the country's energy security goals and renewable energy targets.

It said transitioning to clean energy would require a transition fuel capable of providing baseload generation that would fill in the gap when existing coal-fired power plants start to retire.

Natural gas-fired power plants, for one, could be a quick starting reserves that could complement the variability of renewable energy technologies such as solar and wind, the DOE said.

'Natural gas, therefore, is seen as a suitable transition fuel by which the private sector investments in this technology will be facilitated as a way to enable the viability of large renewable energy capacity additions and ensure the reliability and security of the power system,' it said.

The agency has come out with a draft circular prescribing the policy framework on the development of natural gas power generation facilities in the Luzon grid in support of the energy transition.

With the cost of imported liquefied natural gas (LNG) slightly higher than the indigenous Malampaya, the DOE said the draft policy is supporting a gas aggregation scheme that would allow Luzon distribution utilities to benefit in a relatively lower price of blended imported LNG and natural gas from Malampaya.

The agency said getting a minimum percentage of power supply from natural gas would give the distribution utilities an advantage of taking a competitive price without going through the competitive selection process.

'With the eventual reduction of capacity from coal-fired power plant, natural gas will be the immediate option for the distribution utilities either as baseload, midrange, and peaking requirement because of its flexibility, and with much less harm to environment,' the DOE said.

LNG is considered by the government as an important source for fuel diversification, capable of increasing diversity and security of the country's energy needs.

It is seen to provide the country with fuel and technology that allows flexibility in supporting the various grid demands from baseload to providing reliable mid-merit to peaking power supply.

'LNG is transitory and not an end in itself. The ultimate trajectory is to transition LNG plants to non-fossil-based fuels once the latter are mature,' it said.

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