Eventual Closure of coal-fired plants in the PH for RE alternatives

by Marcelle P. Villegas - November 30, 2021

The Asian Development Bank (ADB) stated last 3 Nov. 2021 that they plan to buy coal power plants in Indonesia, the Philippines and Vietnam with an objective to shut them early and to replace them with clean and renewable energy options. This will be made possible through Energy Transition Mechanism (ETM), a private-sector-led initiative that will be financed through sources like governments, philanthropy and private investors.

ADB will start the pilot fund of USD2.5 billion to USD3.5 billion for the purchasing of the plants from the three Asian countries. They plan to retire the coal plants early for the next 10 to 15 years, which is ahead of its average lifespan. [1]

They said that removing half of the coal power plants in the Philippines, Indonesia and Vietnam will eliminate 200 million tons of carbon dioxide emissions a year. [2]

Ahmed M. Saeed, Vice President of ADB stated that ADB chose Indonesia, the Philippines and Vietnam as their initial participants due to their dependence on coal energy. He said, “In Indonesia, the Philippines, and Vietnam, coal-fired power is an enormous problem. In Indonesia it’s 60% of the energy mix, in the Philippines and in Vietnam it’s over half.” This statement is from an episode of “ADB Insight” which is posted on the bank’s website. [2]

Saeed also said that the ETM program will help coal-dependent countries achieve their goals under the Paris Agreement. He said that the objective of the ETM is to reduce coal-fired power in its three pilot countries by 50%.

ADB said in a statement that retiring 50% of the coal plants in the three pilot countries alone could reduce 200 million tons of CO2 per year. This is equivalent to removing 61,000,000 cars out of the road. [2]

During the ETM Southeast Asia Partnership launch at the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow, Scotland, Masatsugu Asakawa, President of ADB said, "The ETM can usher in a transformation in the battle against climate change in Asia and the Pacific.”

“Indonesia and the Philippines have the potential to be pioneers in the process of removing coal from our region’s energy mix, making a substantial contribution to the reduction of global greenhouse gas emissions, and shifting their economies to a low-carbon growth path.”

From a report by Eco-Business News, more than half of the total of the Philippines’ power generation and some 67% of Indonesia’s electricity come from coal. This is more than 1/3 of the energy consumed worldwide and is the single biggest contributor to climate change.

David Elzinga, ADB's Senior Energy Specialist for Climate Change said that, "The ETM provides a way to accelerate their retirement by providing low-cost financing to coal plant owners. We will acquire or incentivize the plants to retire early, but they will operate for a period of time before they close."

He also said that coal plants cannot be closed right away in order to give enough time for renewable energy alternatives to be fully operational. He said that it is first important that the workers and communities who are dependent on coal to have their livelihood secured first. [1]

COP26 is a summit which addresses climate change issues. This is a global environmental event where delegates from around the world discuss and share their plans and strategies on how to control climate change. Last year's summit was canceled due to the COVID-19 pandemic. This year, UK hosts the event in Glasgow, Scotland between 31 October until 12 November 2021. [3]

Philippine Secretary of Finance, Carlos Dominguez III, is the head of the Philippine delegation to COP26. He said that the Philippines will be piloting the ETM project in Mindanao which is the most coal-dependent region in the country. [1]

Philippine Secretary of Finance, Carlos Dominguez III, is the head of the Philippine delegation to COP26. He said that the Philippines will be piloting the ETM project in Mindanao which is the most coal-dependent region in the country. [1]
Philippine Secretary of Finance, Carlos Dominguez III, is the head of the Philippine delegation to COP26.
He said that the Philippines will be piloting the ETM project in Mindanao which is the most coal-dependent
region in the country. [1]

“We have a unique opportunity in Mindanao to demonstrate our carbon-reduction commitment and pilot the ETM project. In Mindanao, the hydropower source has a huge potential. The government is in the process of rehabilitating the Agus-Pulangi hydropower plant to improve its generating capacity,” Dominguez said. “Mindanao will showcase an Earth-friendly future that can be replicated in other areas in the Philippines and even countries around the world.”

The Department of Finance announced last June that the Philippine government planned to remove coal plants in Mindanao to replace them with renewable energy options. This coincides with their project to improve the old Agus-Pulangi hydropower complex in the region which has deteriorated through the years. The Philippines also declared a coal moratorium last year to reduce greenhouse gases emissions by 75% by 2030. [1]  



[1] Fernandez, Hannah A. (5 Nov. 2021). "Asian Development Bank announces plans at COP26 to partner with investors to buy and retire coal power plants". Eco-Business.


[2] Yang, Angelica (28 Oct. 2021). "ADB sees coal-fired plant retirement scheme saving 200M tons of CO2". Business World. Retrieved from - https://www.bworldonline.com/adb-sees-coal-fired-plant-retirement-scheme-saving-200m-tons-of-co2/

[3] https://www.bbc.co.uk/newsround/51372486

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