DOE excludes expansion projects in coal moratorium

Published January 12, 2021, 1:40 PM

by Myrna M. Velasco

Existing generating facilities with definitive expansion plans will be excluded from the coverage of the coal moratorium policy that was finally firmed up by the Department of Energy (DOE) in an advisory that it issued this week.

Aside from expansion projects, exempted from the prohibited coal plant investments are: a) the committed power projects; and b) the indicative power projects with substantial accomplishments on permitting.

The indicative coal plant ventures that could still be implemented include those: with signed and notarized acquisition of land or lease agreement for the project; and those with approved permits or resolutions from local government units (LGUs) and the Regional Development Council where the power plants will be located.

On the whole, the ventures covered by the coal moratorium will just be the new or greenfield power plant developments that are still requesting for endorsements from the energy department.

The moratorium’s effectivity was as of October 27, 2020 – when Energy Secretary Alfonso G. Cusi, made verbal declaration on the policy. The advisory was dated December 22, 2020 but it was only released January 11 this year.

As could be gleaned from the Philippine Energy Plan (PEP) unveiled by the DOE last month, it is still expecting 9,550 megawatts of capacity addition from coal plants in the next 20 years, primarily to support the country’s continuing need for baseload power.

Cusi, in his coal moratorium advisory, reiterated that the policy is being enforced so the Philippines could increase the share of renewables in the energy mix.

Besides that, the DOE chief also indicated that the energy sector would like to allot space for the promotion of more innovative technologies; as well as increase flexibility of technology utilization and resources in the power system.

The end goal of the coal moratorium and intended shift to cleaner sources of energy will be to pare carbon footprints and enhance measures that could help abate the impact of global warming, given the fact that the Philippines is considered highly vulnerable to natural disasters.

In the past 10 years or from 2010 to 2019, the DOE stated that most of the power capacity additions in the country had been from coal plants – accounting for 66-percent or an aggregate capacity of 6,194MW.

For the other technologies, the energy department showed relatively anemic capacity build-up, with solar capacity expansion just seen at 10-percent for 920MW; 7.0-percent for diesel plants at 657MW; 6.0-percent for natural gas at 582MW; and 4.0-percent for wind plants at 394MW.

At the height of the pandemic, the DOE qualified there had been challenges experienced in the operation of the power system “with the sudden electricity demand reduction and the affected sustained operation of the baseload power plants.”

Given such circumstances, the energy department opined that “there is a need to shift to a more flexible power supply mix to have a more sustainable power system that will be resilient in any structural changes in demand and will be flexible enough to accommodate entry of new and cleaner technologies.”