SMGPH’s FOSSIL GAS EXPANSION:  A Risk to Investment, Energy Transition, and Communities

Earlier this year, the Center for Energy, Ecology, and Development (CEED) released a report “Will San Miguel Corporation power a world made better?” A report scoping the energy transition direction of the Philippines’ biggest fossil fuel expansionist.” As one of the biggest energy players in the Philippines today – accounting for about 17% of the national power mix – SMC has a unique role in moving forward or serving as a roadblock to the Philippine energy transition. Having led coal expansion in the past, SMC now stands as the Philippines’ biggest gas expansionist with over 14 GW in the pipeline.

Last week, the Institute for Energy Economics and Financial Analysis (IEEFA) in its new report, warned that SMC’s power arm San Miguel Global Power Holdings (SMGPH) is facing financial issues due to its heavy reliance on fossil fuels.

As SMC is set to celebrate its anniversary this week, this briefing looks into how the conglomerate’s fossil gas expansion is a cautionary tale on the risks involved in a power business centered on coal and gas and that SMC has a clear location as a major actor in the energy transition in the Philippines if it fully realizes its renewable energy portfolio. With communities resisting fossil gas expansion and a growing shareholder divestment movement, SMC must rethink its role in enabling coal and gas expansion plans in the country.