S-E Asia’s largest LNG power plant developer faces ‘significant’ financial risks from fossil plans: think tank

AMBITIOUS fossil fuel expansion plans of San Miguel Global Power Holdings (SMGPH), touted as the top post-Paris developers of gas-fired power plants in South-east Asia, appear to be backfiring on it.

US-headquartered think tank Institute for Energy Economics and Financial Analysis (IEEFA) released a new report on Monday (Sep 18) showing that the company, which started importing liquefied natural gas (LNG) this year, is at risk of locking in financial instability caused by an overexposure to volatile fossil fuel prices. 

SMGPH is the wholly-owned energy arm of Philippine-listed conglomerate San Miguel Corporation. It controls 4,719 MW of operational power capacity, making it the largest power generation company in the Philippines by installed capacity. 

As at June 2022, coal contributed 62 per cent of its capacity, LNG accounted for 25 per cent, with hydropower and battery energy storage system making up the rest.

Taking into consideration projects in its pipeline – 1,900 MW of new coal capacity and 1,313 MW of new gas-fired capacity by 2025 – its mix in 2025 is forecast to be 28 per cent LNG, 46 per cent coal, 11 per cent battery energy storage systems, and 15 per cent hydro and solar power. LNG’s share is expected to grow substantially beyond 2025, with over 10,000 MW of gas-fired power plants proposed.

The IEEFA study looked at the 2022 financial year operating results of SMGPH’s key power plants to find that higher coal and gas costs resulted in large losses among many of the company’s largest facilities.

PHOTO: SAN MIGUEL CORPORATION - San Miguel Global Power Holdings is the energy arm of Philippine-listed conglomerate San Miguel Corporation. It controls 4,719 MW of operational power capacity, making it the largest power generation company in the Philippines by installed capacity.