Japanese power producer Jera has invested in Philippine utility Aboitiz Power, hoping to contribute to an "expeditious, cost-competitive" rollout of clean energy in the Philippines, whose power needs are rising and primarily met by coal.
Jera, a 50:50 joint venture between Japanese utilities Tokyo Electric Power and Chubu Electric Power, signed an agreement on 27 September to invest $1.58bn and acquire a 27pc stake in Aboitiz Power. The transaction, once completed, will enhance Jera's presence in the Philippines' energy sector, the Japanese firm said.
Aboitiz Power is one of the largest power generators in the Philippines, with a power generating capacity of 4.43GW making up 16.85pc of the country's total installed generating capacity. It aims to expand its power generation capacity to 9.2GW to meet rising demand in the country and achieve a 50:50 power mix of thermal capacity and renewable energy by 2030, with Jera's $1.58bn investment potentially providing support.
Jera will work with Aboitiz Power on a roadmap to reduce CO2 emissions in the Philippines and explore developing zero-emission thermal power generation technologies, which Jera is already working on in Japan. "Such technologies avoid CO2 emissions during power generation by using green fuels such as ammonia and hydrogen," Jera said. Its investment comes as it accelerates technology development and new businesses related to cutting CO2 emissions to achieve its goal to reduce 20pc of CO2 from power plants by 2030 and achieve net-zero greenhouse gas emissions by 2050.
The development of electric power infrastructure is an urgent priority as the Philippines is experiencing rapid economic growth, and electricity demand is expected to grow at an average of 4.2pc/yr until 2030, Jera said.
The firms are also exploring collaboration in areas such as new generation technologies and developing LNG-to-power projects. Jera has also signed an initial agreement with Aboitiz Power to collaborate on fuel sourcing and the management of LNG required for potential LNG power plants that can supplement intermittent renewable energy, the Japanese firm said.
The Philippines' total coal-based power capacity stood at 10.94GW last year, accounting for 41pc of the country's total installed capacity, according to data from the country's department of energy (DOE). Coal-fired generation stood at 58.18GWh last year, comprising 57.17pc of total power generation. Renewable energy currently accounts for 29.11pc of the country's total installed capacity, and the DOE plans to raise it to 37.3pc by 2030 and to 55.8pc by 2040.
