Gas and Coal Economics, page-43

COAL OR NATURAL GAS IS NOT AN EITHER OR QUESTION
David Celestra Tan, MSK
December 5, 2017
There is an ongoing battle for the minds of the people and policy makers between pro-coal and pro-LNG. It is however not an either or question.
The country needs a diversified energy source mix for security, price flexibility, and environment.
First on the country's list must be cleaner and cheaper indigenous energy. That means hydro and geothermal. If the solar, wind, and biomass people get over their windfall from Fit mindset, these too can become part of the country's cleaner and cheaper priority.
Then comes balancing between coal and LNG. Since the enterprising Meralco cartel members have understandably gravitated already to the highly profitable and less risky coal, the government will need to give special impetus to LNG development.
LNG is an essential part of our energy mix. Even the imported kind. It is comparatively cleaner than coal and the prognosis for price volatility is better. Our coal sources are mainly Indonesia, Australia, and the Kingdom of Semirara. Something political or environmental disaster happens in Indonesia that constrains supply and consumers are screwed because fuel is a pass on charge.
The supply curve of LNG is much better. Even the USA have come on strong in the global supply from fracking. Our challenge is creating the infrastructure for LNG importation. If not by the government, by encouraging the pioneering private investors in LNG.
Depending on the price trends of the two main fuel source, the country can calibrate its power production mix. Lets run more the LNG plants if the prices and supply are favorable.
The addition of imported LNG to the energy mix additionally opens up opportunities beyond price and environment. It will facilitate the development of suitable and cheaper "fast responding" peaking and reserve capacity such as gas and aero-derivative turbines. These cannot run on coal. Currently most of them are diesel and bunker c.
Industries and commercial users can convert to natural gas fueled on-site generation even for standby generators. These are logistically and environmentally difficult with coal.
Let us promote LNG fueled power generation not because we hate coal (although we do, yes it is a necessary evil) but we need them to balance our energy mix. We need them both. There is too much coal already so the government must put the brakes on them and balance the mix with LNG.
In fact the government can start with Meralco's anomalous seven (7) midnight contracts, all of which are coal. One way to get something good out of the bad situation is to require them as a compromise to convert half of those 3,551mw to LNG. That is easy to do because all the projects are controlled by MeralcoPowerGen. One of the two Global Business power projects must be changed to LNG. One of the two San Miguel 528mw projects can be LNG. Half of the 1200mw Atimonan One can be LNG. EGAT can also be required to go into LNG.They all have to be price competitive though.
Then lets watch out for fission technology. Or laser delivered power zapped from Mars. Before that lets watch-out for the violation of cartelization laws.
Meanwhile, we need both coal and LNG in our energy mix. It is not an either or question.