Coal moratorium to stay under Marcos admin – DOE

The coal moratorium policy will be sustained under the Marcos administration, Energy Secretary Raphael Perpetuo Lotilla declared.

“The moratorium on the building of new coal-fired power plants has been set and you know I don’t believe in completely changing policies and therefore changing mixed signals to investors,” Lotilla noted.

It was in October 2020 when the past Duterte administration enforced the policy that practically put to a screeching halt the greenfield power investments planned on the coal technology genre.

With energy markets getting tormented currently by surging fuel commodity prices, the DOE chief opined that “market behavior is not favoring the construction of more coal plants; you know that insurers do not want to support it – investors, they’re also finding it difficult.”

Lotilla similarly sounded off that flip-flopping in policies will not end up advantageous when it comes to the target of the Marcos administration to fix the country’s energy insecurity predicaments.

“One day, we say there’s a moratorium, then the next day with the change of administration, no more moratorium. We have to be more considerate and consistent – considerate to investors because they get their signals from government -- especially both foreign and domestic investors do not make distinction between one administration and another,” he stressed.

The energy secretary added “what they are looking for is consistency in terms of the core policies and I think while it is important to stress that we need all power available from different sources now, we should not proceed to kill any of them because we need all of them at that time when there’s a shortage, but there should be a managed, orderly transition.”

The DOE is currently spearheading the country’s “energy transition agenda,”a pathway that primarily targets to accelerate capital flow in the renewable energy sector.

The past leadership of the DOE previously emphasized that the only coal plants allowed to be constructed would be those that were already at permitting stages; as well as the committed projects or those that already advanced on tapping their engineering, procurement and construction (EPC) contractors or have secured project financing.

Coal is currently the ‘king’ or dominant fuel in the Philippine energy mix, as that was the easiest technology solution that investors were able to tap into when the country had been suffering from recurring power supply crisis.

Nevertheless, with coal prices in the international market now surging above $400 per metric ton, the domestic energy market has been experiencing the downside of relying heavily on imported fuels.

The biggest supplier of coal to the country’s power plants is ASEAN-neighbor Indonesia, but when it had imposed temporarily ban on exports early this year. The Philippine energy market had been extremely perturbed at probabilities that shortage of coal being shipped into the country could trigger rotational brownouts or power service interruptions.