ENERGY think tank and global consultancy IHS strongly urged the Philippine government to craft a stronger policy framework that will ensure a balanced power-sector fuel mix.
Moving forward, IHS, in its study on Sustainable Energy Transition for the Philippines, recommended a clear adoption of energy-mix priorities, including a role for gas, coal and renewables by all stakeholders; recognition of the gas competitiveness in midmerit to achieve a balanced fuel mix; and wider discussion on policy options and road map to achieve this balanced energy mix.
The Department of Energy is pushing for a 1/3 rule: 30 percent for coal, 30 percent for gas and 30 percent for renewable energy; and the rest for other technologies.
IHS noted that today the Philippines has a balanced fuel mix, with coal’s share at 42.5 percent; gas, 24.9 percent; hydro, 13.3 percent; geothermal, 12.7 percent; and oil-based, 6.3 percent.
The future, however, is uncertain as coal is seen to take up 56 percent of the mix by 2020 and only 35 percent for gas. This is because there are 23 new coal-fired power plants lined up for commercial operation in the next five years.
“If coal projects are implemented as planned, Luzon’s coal-generation share will be over 75 percent by 2030, and many coal plants will be uneconomic,” it said, adding that, “Without intervention, the Philippines is on the path to having the highest coal share in Asia, despite the Department of Energy’s intent to have the one-third rule.” Many power companies generate power from coal because it is the cheapest among all power sources.
“You want a good mix in power generation? If you look at the cost, coal is the cheapest. But you just don’t want to have the cheapest. You need to have reliability and self-sufficient power source. Moreover, you have to take into consideration the health and environmental factors. The end goal is to have a fuel mix that does not only take into account the price alone,” former Energy Secretary Carlos Jericho L. Petilla had said.