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An Expensive Shift

Posted By Herkings Corporation, Saturday, 9 July 2016

Source : Philippine Star (


One of the challenges facing the new administration is crafting a dependable and practical mixed energy use policy, one that would utilize both base load plants (coal and natural gas) along with renewables, as we transition to a low-carbon economy in fulfillment of our international commitments.

Newly installed Energy Secretary Alfonso Cusi has said that he will strive for a reliable, steady and affordable power supply as well as greater energy self-sufficiency, in line with the government’s agenda for sustained economic growth and social progress over the next six years.

To achieve this, the Duterte administration is likely to retain coal as an integral part of the country’s electricity generation mix while striving to expand the use of renewable energy sources.

Cusi, in a press briefing, emphasized that coal is the more dependable and is the more reliable source for base load, and that as a developing country, we cannot afford not to have coal.

He said there is a need to find a happy balance, since our country cannot afford to rely solely on renewables.

Under the Aquino administration, the Department of Energy had pursued a 30-30-30 energy mix, composed of coal, natural gas and renewable energy, with the remaining 10 percent for other technologies. But the Climate Change Commission (CCC) wants a virtual crackdown on coal power generation in line with the country’s commitment under the United Nations Framework Convention on Climate Change (UNFCCC) commitment to cut greenhouse gas emissions by 70 percent by the year 2030.

But this is easier said than done, especially with the country’s power demand expected to double to 20,000 to 24,000 megawatts in the next 15 years in case the economy continues to expand by at least six percent per year.
This means we cannot just abandon our coal-fired power plants unless we are prepared to deal with a crippling energy shortage.

Aside from coal power being readily available and affordable, this energy source now uses clean technologies already popular in “green” economies like Finland and Germany that guarantee ultra-low emissions.

Germany and Spain had first established their economies and industries before shifting from traditional to RE power. In Germany, coal is still being used in major cities to fuel the growth of industrial zones.

While renewable energy sources may be desirable, the sad reality is that they are still expensive to produce. In fact, the feed-in-tariff (FIT) rate for coal is at P4.2079 per kilowatt hour, compared to wind power which is P7.40 per kwh and solar at P8.69 per kwh.
Another argument going against renewable energy sources, like wind, is reliability. Only baseload plants like those powered by coal that are available on demand could provide industries with a reliable, continuous supply of power.

Even President Duterte has noted that developing countries like the Philippines are being compelled to curb their carbon emissions and limit their productivity, while industrialized ones, which were able to build their economies using coal and other traditional sources of energy, cannot even do more to help ease the effects of climate change.

These are important matters that the new Environment and Natural Resources Secretary, Gina Lopez, should consider before she comes out with a policy for or against coal energy.
We don’t know if Lopez, who has joined in the past several protest actions against the use of coal energy and to stop the construction of coal-fired power plant projects, will have a change of heart.

There are a number of coal projects, including the 600-MW coal-fired power plant that the Gokongwei-led JG Summit Holdings Inc. plans to build in Barangay Pinamucan Ibaba in Batangas City, that are awaiting government approval.

The new administration should speak with one voice. We cannot have the President and his energy secretary supporting a mixed energy policy that includes coal while the environment secretary is derailing the issuance of environment compliance certificates (ECCs) for new coal power plants because of her personal advocacy.

The environment chief should also be careful lest she be accused of protecting her family’s business interests in the renewable energy sector as some of her bashers are saying.
Who knows, there might come a time when renewable energy sources will be cheap enough to dislodge traditional energy sources.

But now is too early. Unless consumers are willing to pay the cost in terms of higher power rates and the consequent increase in the price of basic goods and services.

According to industry sources, the current demand for 12,000 MW could increase to as much as 20,000 to 24,000 MW in the next 15 years. This means an additional capacity of 10,000 MW, from the current installed capacity of 16,000 MW, is needed to meet growing demand.

It would seem that the 16,000 MW of installed capacity is enough to meet the current demand of 12,000 MW. But we also have to consider the fact that there are maintenance shutdowns or unscheduled outages that would put our installed capacity in danger.
“Yellow alerts,” are now becoming more frequent because of our thinning reserves. Power transmission firms place certain areas on “yellow alert” when the actual produced power is much lower than the power plants’ nameplate capacity, especially when some of them are on maintenance shutdown or on an unscheduled outage.

Our country needs investments and industries if it wants to create more jobs especially in the rural areas. Even the new trade and industry secretary Ramon Lopez is eyeing a drastic increase in foreign direct investments. But how can this happen if we do not have a reliable and affordable power supply that we can promise investors?

Even the so-called first world countries cannot abandon their traditional energy sources because they know that business needs them. Why should we be forced to comply with these climate change treaties ahead of the more industrialized countries whose carbon footprints are definitely much bigger? We need coal to grow as an economy. That is the reality these so-called environmentalists have to accept. And instead of condemning coal outright, maybe the DENR should just be vigilant enough to make sure that these coal-fired power plants are using clean coal and putting in the necessary equipment to make sure that their emissions are up to par if not better than standards.

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Tags:  coal  doe  energy  fuel mix  Power  power plant 

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