As the Philippines transitions toward a green future, coal and gas continue to play a vital role in ensuring energy stability and supporting economic growth. While renewable sources are expanding, coal and gas remain essential to meet current demand, prevent power shortages, and provide reliable energy for industries and households. Balancing these traditional fuels with emerging green alternatives is key to a secure and sustainable energy transition.
To deepen energy journalists’ understanding of the complex power industry, AboitizPower (AP) hosted the Power 102 forum—a continuation of the previous year’s Power 101 seminar. Ronald Suarez, AP’s Vice President for Corporate Communications, stated, “As a follow-up to last year’s Power 101 seminar on energy policies and pricing, Power 102 tackled the challenges of growing variable renewable energy capacity in the Philippines in the context of a dynamic regulatory and technological environment to secure a resilient and reliable grid.”
Expert speakers from the Department of Energy (DoE), Energy Regulatory Commission (ERC), and local and international private energy companies were invited to share insights and address industry challenges.
Navigating the country’s energy security challenges
During the forum, Meralco Vice President Lawrence S. Fernandez explained that distribution utilities like Meralco pass on the real costs of electricity generation to consumers. Recently, these costs increased due to supply shortages and alerts about potential power outages. He explained, “We hope this rise in generation charges provides an adequate price signal for additional generation capacity, including expediting permits and approvals for power plants and contracts.”
Last July 2024, electricity costs saw a notable increase in generation charges, but two other developments stood out. The National Grid Corp. of the Philippines (NGCP) lowered its transmission charge by P0.155 per kilowatt-hour (kWh), providing some relief to consumers. However, taxes, including VAT and local franchise fees, rose by P0.175 per kWh.
In his BusinessWorld column, Bienvenido Oplas, Jr., who attended the seminar, commended NGCP’s decision to reduce transmission charges, especially following the successful completion of three major projects. These projects include the Mindanao Visayas Interconnection Project, which began operations on January 26; the Cebu-Negros-Panay interconnection, inaugurated in Bacolod City on April 8; and the Mariveles Hermosa San Jose interconnection, launched in Bataan on July 12, all under the leadership of President Ferdinand Marcos, Jr.
The event also included the Department of Energy (DOE) responding to various newspaper reports stating that “PH dependency on coal-fired power surpasses China and Indonesia.” The DOE emphasized that the power generation mix in the Philippines is not directly comparable to that of larger economies such as China and Indonesia. “China has an installed coal power plant capacity of 1,136.7 gigawatts (GW), Indonesia has 51.6 GW, while the Philippines has only 12.1 GW.”
A global overview of coal generation in the PH
In his article, Oplas compiled a table that highlights the total coal power generation in terawatt-hours (TWh) for various countries, shifting the focus from percentage shares of their energy mix. He noted that the Philippines generated 69.5 TWh of coal power in 2023, a figure that has been surpassed by several countries over the years. For instance, Vietnam reached this level back in 2018, while Indonesia achieved it in 2011 and Taiwan in 1998. South Korea hit this milestone in 1995, and both Australia and Canada likely did so in the 1970s. Furthermore, countries such as the UK, Russia, Japan, China, and India probably achieved similar coal generation levels between the 1940s and 1960s, with the United States potentially reaching this point as early as the late 1800s.
Oplas advocated for a shift in perspective regarding coal plants, suggesting that rather than condemning them, there should be an emphasis on expanding coal generation capacity, particularly in Iloilo, Cebu, and Mindanao. He proposed pursuing “brownfield” investments, which involve “the expansion within existing facilities which will no longer require new environmental clearance certificates (ECC), and which are not covered by the DoE’s coal plant moratorium order in 2020.”
Boosting Energy Security Through LNG Expansion
Oplas highlighted that the expansion of global liquefied natural gas (LNG) exports has been largely shaped by U.S. energy policies. From a baseline of 358 billion cubic meters (bcm) in 2016, LNG exports increased to 393 bcm in 2017 during Donald Trump’s first year in office and reached 490 bcm by 2020, the final year of his presidency. President Joe Biden continued this upward trajectory, with U.S. LNG exports climbing to 114 bcm in 2023.
In conclusion, Oplas pointed out the Philippines stands to gain from the increasing availability of LNG. With existing gas plants relying on Malampaya gas, the country is poised to benefit from new large gas facilities that will operate on imported LNG. This diversification allows the Philippines to source LNG from the U.S., Qatar, Indonesia, Malaysia, and other countries. By expanding both coal and gas infrastructure, the Philippines can improve its energy security, which will also contribute to economic stability and growth.
Source: https://www.bworldonline.com/opinion/2024/07/18/608737/on-coal-gas-and-energy-security/