DOE opts for voluntary coal plant retirement, repurposing as ‘energy transition’ approach

At a glance

  • Energy Usec Guevara and CSV Managing Partner Lawrence Ang.jpg
  • Energy Undersecretary Rowena L. Guevara and CSV Managing Partner Lawrence Ang at the presentation of 'Philippine energy transition' initiatives that was done on the sidelines of the UN General Assembly in New York.

It will not be a mandatory policy – rather, it will be a voluntary retirement or re-purposing of coal-fired power plants that the Department of Energy (DOE) will be advocating for in the country’s multi-tiered ‘just energy transition’ paradigm.

As presented by Energy Undersecretary Rowena L. Guevara on the sidelines of the United Nations General Assembly (UNGA) in New York, the Philippines will be focusing on at least four strategic energy transition initiatives – and coal plant retirements or retrofit will just be one of them.

On the discussion centering on: “Mobilizing International Support for Power Sector Decarbonization in the Philippines,” the energy official added that the three other carbon-footprints lowering undertaking being advanced are those on: accelerated renewable energy (RE) development; a smart and green grid system that supports RE development; as well as port buildup to support offshore wind installations.

For these targeted ventures, Guevara sounded off that the country has been opening its arms “to partner with the private sector, international donor community, and development partners to drive the transformation of our power sector in an ambitious, just and sustained manner.”

She further apprised investors that “several policies are already in place to support renewable energy growth in the country including recent directives to allow for 100% foreign ownership of power projects.”

And when it comes to having first-mover advantage on coal plant retirement anchored on an energy transmission mechanism (ETM) financing package, it has been ACEN Corporation of the Ayala group that already etched its mark on this sphere – by shortening the life cycle of its 246-megawatt South Luzon Thermal Energy Corporation (SLTEC) coal plant by roughly half.

On RE installations, this is underpinned by the Renewable Portfolio Standards (RPS) policy sanctioned by the DOE – and this will ramp up the share of renewables in the energy mix by 35% in 2030; and that will escalate to 50% by 2040.

In parallel, Climate Smart Ventures Pte. Ltd. (CSV) Managing Partner Lawrence Ang cited “the once-in-a-generation opportunity of grid transformation as a means to systematically unlock renewables for the Philippines and enable first movers for the transition.”

He highlighted that “rapid developments in renewable energy, such as offshore wind and other technologies, present an opportunity to further diversify the country’s power mix and pass-on economic benefits to consumers.”

Ang, nevertheless, qualified that “the country’s current transmission infrastructure and slow growth of ancillary supply contracts limit penetration of renewable energy.”

By far, he labeled the Philippine government’s leaning on massive scale RE investments as a “bold and decisive approach to enable the coal-to-clean transition through grid expansion and offshore wind power development.”

He stated if that strategy turns out successful, “these will effectively steer first movers to accelerate their transition plans.”

On the part of the CSV, Ang asserted that his company is “keen to support the Philippines’ decarbonization journey and invite the international community to support this unique country-driven program.”

In turn, Rockefeller Foundation Managing Director Joseph Curtin has given their organization’s commitment “towards supporting innovative solutions to the climate crisis around the world,” while primarily setting reference to Philippines on having a  “clear blueprint to transition towards cleaner energy sources.”