Beyond the volume that shall be allocated for its domestic requirements, the government of Indonesia has assured continuous coal supply that can be utilized by the power plants in the country, according to Energy Secretary Raphael P.M. Lotilla.

“Our bilateral with Indonesia is making sure that the Philippines will have continuous access to regular coal supply. As you know almost 80% of our coal supply for our coal-fired power plants and for non-power uses is sourced abroad – and 98% of this imported coal is from Indonesia,” the energy chief noted.

Lotilla conveyed that based on talks he had with Indonesian Minister for Energy and Mineral Resources Arifin Tasrif, “Indonesia reiterated to us its assurance that the Philippines will continue to get continued supply for its coal-fired power plants.”

With that facet of energy diplomacy being firmed up with Indonesia, he qualified that the Philippines can be spared from another round of jittery situation when the country teetered on the edge of coal supply uncertainty – similar to what happened in early part of 2022 when Indonesia had restricted its coal exports.

To recall, the operators and owners of coal-fired power plants in the country had prodded the Department of Energy (DOE) then to appeal to Indonesia so their generating facilities would not end up on curtailments due to fuel shortage.

Lotilla indicated that Indonesia somehow explained its predicament during that period – that the curb in exports had to be resorted to because it first needed to satisfy its domestic requirements, that was following the downtrend in its overall coal production.

“It reached a point that they will run out of supply for their domestic coal-fired power plants, that’s why they need to impose a moratorium. But now, they gave assurance that they make sure that we will have uninterrupted supply,” he said.

The energy secretary added “they already have a firm agreement. In a way, it’s an enforcement problem that the local companies will not be able to export unless they first satisfy the domestic requirements of Indonesia.”

With that predicament already sorted, the energy secretary emphasized that Indonesian coal miners are in fact more inclined to sell their output to the international buyers because they can fetch higher prices compared to selling it to their domestic users.

“They have a two-tier pricing system, their prices for domestic use of coal was much lower than the export prices, so Indonesian miners would rather sell in the international market – the export market,” he stressed.

On top of that, Lotilla sounded off that part of the bilateral discussion with the Indonesian minister had been a “memorandum of cooperation that we will discuss what we call ‘emergency response’ or assistance in case of supply constraints.”

The power supply of the Philippines still leans largely on coal-fired power generation, hence, it is highly necessary that the supply of this fuel won’t be disrupted as that is one sure formula to spare Filipinos from blackout predicaments.