As the push for renewable energy (RE) gains momentum, the Department of Energy (DOE) emphasized the need for a fair transition for the private sector that has invested in coal facilities.
During the Powertrends International Business Forum 2024, DOE Assistant Secretary Mario Marasigan addressed concerns regarding the gradual increase of RE in the country’s power mix.
Marasigan noted that this transition presents challenges, particularly due to the absence of specific policies regarding coal retirement, alongside existing investments in coal power.
“There is no direct policy yet for coal retirement. But there are established guidelines for energy transition,” he said on Friday, Oct. 4.
“Although this is not firm, we are looking for technologies that can help transform all these coal terminal facilities. We are looking at the commissioning and the retirement,” Maraisgan added.
Coal terminal facilities serve as storage sites for coal before it is delivered to power plants, ensuring a reliable energy supply. The DOE official remarked, “We are examining how these coal terminal facilities operate.”
The transition to renewable energy is not an easy task for the energy sector, not only because RE can be intermittent, but also because many private companies have already invested significantly in coal.
“The next step is to respect the investments made by our private sector. If we want to retire these facilities, there must be adequate compensation. We need to find mechanisms that will allow them to recover their investments while continuing to generate energy,” Marasigan explained.
To mitigate the impact of the shift to green energy, the DOE proposed several strategies for transitioning from coal.
“The first step is to replace coal terminal facilities with renewable energy options or to re-engineer existing facilities using either old or new technologies,” he said.
This could lead to reduced energy consumption and lower fuel usage for each kilowatt-hour produced, according to the DOE assistant secretary.
The government is also exploring ways to finance these projects and is actively collaborating with the Bangko Sentral ng Pilipinas (BSP).
“There is a new regulation that will facilitate funding from local banks, not only for coal energy transition projects but also for new coal projects not covered by the coal moratorium, provided they include components for energy transition. We are looking into options that could encourage the private sector to participate in this transition,” Marasigan elaborated.