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On 27 October, the Philippines announced a moratorium on new
coal-fired power plants, building on a policy announced in May 2020
to expand the use of renewables for both environmental and
reliability purposes.
The announcement was made by Energy Secretary Alfonso G. Cusi
during a speech at the 2nd Global Ministerial Conference on System
Integration of Renewables, which was held as part of Singapore
International Energy Week 2020.
"This will help build a more sustainable power system that will
be resilient in the face of structural changes in demand and will
be flexible enough to accommodate the entry of new, cleaner, and
indigenous technological innovations," the Energy Agency said in
transcript of Corsi's remarks.
To facilitate the energy transition away from coal, the
Philippines announced on the same day that it will now allow 100%
foreign ownership in large-scale ($US50 million or more) geothermal
exploration, development and utilization projects.
Another part of the transition was the Open and Competitive
Selection Process (OCSP3) for renewable energy service contracts,
which was held on 20 October. "From an investment perspective,
OCSP3 allows for 100% foreign ownership in large-scale geothermal
exploration, development, and utilization projects," Corsi
said.
Coal-fired power represented 41.5% of the nation's power in June
2020, according to the Philippines Department of Energy (DOE), and
oil and natural gas contributed another 29%. Renewables, mostly
hydropower, contributed less than 30%. But solar in particular
could surge beyond 35% of the power mix by 2030, Corsi said.
Already, the figures represent the highest renewable energy
share among countries within the Association of Southeast Asian
Nations (ASEAN) region, he said. "Despite this, I am determined to
accelerate the development of our country's indigenous resources.
We are also pushing for the transition from fossil fuel-based
technology utilization to cleaner energy sources to ensure more
sustainable growth for the country," Corsi said.
Reaction
The Institute for Energy and Financial Analysis (IEEFA), a
US-based analysis firm, said that about 10 GW of coal-fired power
plants have been proposed and would, presumably, not receive
permits under the new rules.
"This announcement is the end-result of an urgent policy review
which began at the start of the year and addresses power market
problems that were exacerbated by the pandemic. It also comes as
Super Typhoon Rolly delivers a firm reminder about the importance
of flexible grids and decentralized modular renewable energy
generation for both lower prices and improved power sector
resilience," IEEFA said on 28 October.
In May 2020, coal-fired power accounted for 60% of the energy
outages in the country, according to DOE.
"The DOE decision marks a clear break with past policies and
comes as the Philippines prioritizes the need for more flexible and
lower cost alternatives to thermal power baseload," IEEFA said.
"The Department of Finance's leadership continues to make clear the
aim to shift investors to clean energy resources and green
technologies. They have also indicated their determination to make
economic development more inclusive and communities more
resilient."
IEEFA also predicted that the shift to renewables will reduce
prices in the Philippines, as the nation currently has higher costs
than most of its ASEAN peers, but new, more efficient energy
production could close that gap.
Posted 01 December 2020 by Kevin Adler, Chief Editor
