Image: The GNPower Mariveles coal-fired power plant in the Philippines. Photo: courtesy of Aboitiz Power Corporation.
A moratorium on the endorsements of greenfield coal power plants was issued by the Department of Energy (DoE). This announcement was made while allowing foreign investors to now have full ownership of geothermal plant projects in the Philippines. DoE’s decision to stop the endorsements of coal power plants is the result of an assessment that showed the importance of focusing on a “more flexible” power supply mix.
According to Energy Secretary Alfonso G. Cusi while at a virtual conference with world leaders held in Singapore, “This would help build a more sustainable power system that will be resilient in the face of structural changes in demand and will be flexible enough to accommodate the entry of new, cleaner and indigenous technological innovations.”
DoE is currently updating their Philippine Energy Plan for the next 20 years. Mr Cusi mentioned that DoE is committed to accelerating the development of the Philippines’ resources while “pushing for the transition from fossil fuel-based technology utilization to cleaner energy sources to ensure more sustainable growth for the country.” [1]
According to Undersecretary Felix William B. Fuentebella of DoE, the ban on endorsing new coal-fired power plants will not affect those power plants that have received endorsements in the past. He said, “We need to prepare for the influx of RE (renewable energy) under the recent policies issued by the DoE. Hence, the need for more flexibility.” [1]
On note, 3,436 MV of committed coal-fired power projects in Luzon are ongoing as of August 2020. This includes the Meralco Powergen Corporation and GNPower Dinginin Ltd. Co. which is a joing venture of the Ayala and Aboitiz groups. Additionally, a 135 MW coal-run power projects in Visayas and 420 MV in Mindanao have been endorsed by DoE. Overall, there are around 10,000 MV indicative coal-fired power plant projects in the Philippines which may receive government endorsements. Mr Fuentebella said these will need to be sorted out. The ban will continue until the country will require additional baseload power, according to DoE official. [1]
In relation to the ban, Center of Energy, Ecology and Development (CEED) pointed out that there are still environmental concerns about the existing coal-run power plants in the Philippines. CEED Director Gerard C. Arances said, “That is still concerning and alarming vis-à-vis pollution, climate imperative, and costly electricity in the country.”
Another important announcement made by DoE is the upcoming open bidding round of renewable energy service contracts that will now allow foreign companies to own large-scale geothermal projects. This includes exploration, development and utilization. Last 20 October 2020, DoE released a circular providing the guidelines for the third Open and Competitive Selection Process (OCSP3) in the awarding of renewable project contracts.
Cusi said, “From an investment perspective, OCSP3 allows for 100% foreign ownership in large-scale geothermal exploration, development and utilization projects.”
DoE clarified that big geothermal projects are those with an initial investment cost of about $50 million and are under Financial and Technical Assistance Agreements, signed and approved by the Philippine President.
Reference:
[1] Ang, Adam J. (27 October 2020). Business World. “DoE bans new coal-run power plants”.
Retrieved from - https://www.bworldonline.com/doe-bans-new-coal-run-power-plants/
