The Philippines and Vietnam plan to boost their gas-fired power capacity, but are facing delays and higher costs because of a global gas turbine shortage, according to a report released today by the Institute for Energy Economics and Financial Analysis (IEEFA).
Major gas turbine manufacturers have reported significant production backlogs, with delivery timelines stretching up to around 7-8 years. "Turbine backlogs add to an already lengthy list of regulatory and financial challenges delaying gas-to-power projects in Vietnam and the Philippines," said the report's author and LNG/gas research lead for IEEFA, Sam Reynolds.
Vietnam aims to have 22.5GW of LNG-fired power capacity and 14.9GW running on domestically produced gas by 2030, up from 1.6GW and 8.3GW respectively. But the country is likely to miss these targets by a combined 25.2GW, said the report.
Vietnam has two proposed projects that have likely secured turbines, but they still face other barriers to financial closure, such as the lack of power purchase agreements, gas supply agreements, and government guarantees for payment obligations and foreign currency convertibility, according to the report.
The Philippines has one project in Batangas that is set to begin fully operating this year, but the country will likely not bring any other new LNG-fired power plants on line this decade, according to the report, because its other proposed projects with a total capacity of 10.7GW are still in early stages of development, and have likely not yet procured gas turbines.
Existing gas-fired facilities in both countries have relied exclusively on turbines from manufacturers GE Vernova, Siemens Energy and Mitsubishi Heavy Industries (MHI), which together account for about 90pc of heavy-duty gas turbine orders since 2015.
But a surge in orders from the US and the Middle East, coupled with supply chain constraints for manufacturing, has created a shortage globally. Orders for approximately 80GW of turbines were placed in 2024, compared with an estimated output capacity of 30GW between the three largest manufacturers.
At the same time, countries in Asia will likely accelerate renewable energy and battery storage development for power grid balancing. Solar and wind projects usually have a timeline of around one year, whereas LNG-to-power projects can take up to four years, without factoring in the turbine shortages, said the report.
"Gas turbine shortages make the case for renewable energy in Vietnam and the Philippines even clearer," said Reynolds. "Every year of delays for gas and LNG-fired power plants means that less gas and LNG will be needed in the long run."
Southeast Asia has the technical potential for 20TW of untapped variable renewable energy — solar and wind power — which is about 55 times the region's current total generation capacity, according to Paris-based energy watchdog the International Energy Agency (IEA). Measures such as unlocking the flexibility of existing conventional power plants, improving forecasting systems, updating grid codes for renewable connections and modernising grid monitoring and control capability do not require significant investment or restructuring of power systems or markets, according to the IEA, meaning the region's renewable potential can feasibly be harnessed.
