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Why is the Philippines so focused on coal?

ALTHOUGH FOSSIL fuels are the single biggest source of greenhouse gas (GHG) emissions, coal continues to be supported by both the government and businesses in the Philippines.

While it is the cheapest fuel option, coal is also the most polluting one. With cleaner alternatives such as hydropower, solar, and wind energy readily available and decreasing in price, coal is no longer the safe, long-term investment it once was.

But burdened by the high cost of electricity, regular power interruptions and an unreliable transmission system, coal remains a viable energy option for the Philippines – especially with the subsidies, financial incentives and other forms of support that the industry enjoys Coal is the country’s dominant energy source with a 52 percent share in gross power generation as of December 2018, followed by renewable energy sources (geothermal, hydro, solar, and wind) with 22 percent and natural gas at 21 percent.

Plans by the Department of Energy to ramp up coal production from 23 million metric tons (MMMT) from 2017-2018 to a staggering 282 MMMT from 2023-2040 as stated in its Coal Roadmap 2017-2040 flies in the face of the country’s ratification of the Paris Agreement, in which it committed to a 70 percent reduction in emissions by 2030.

While President Rodrigo Duterte used his State of the Nation Address in July to call for the fast-track of renewable energy development and a reduction in the dependence on traditional energy sources “such as coal”, he inaugurated a new coal-fired power plant last month – and there are plans for more such new developments.

More coal-fired power plants

The Philippines imports 75 percent of its coal supply – most of it from Indonesia and Australia – exposing the country’s electricity system to political unrest, price volatility and the risk of unfavourable foreign exchange rates.

This has made local coal-fired power plants an attractive proposition for power companies, and a recent report by environmental group Greenpeace detailed how five of the country’s biggest energy companies plan to increase their coal portfolios in the next two to six years from the current 14,579 megawatts (MW) to a proposed 21,836 MW.

Because they account for more than half of the current and proposed power projects in the country, Greenpeace argues that these companies’ actions will be crucial in determining whether the Philippines can comply with the low-carbon development path needed to address the global climate crisis.

“While the rest of the world is moving away from fossil fuels and shifting to clean renewable energy, the Philippines is moving in the opposite direction, largely because of pro-coal government policies that allow energy companies to keep building coal facilities despite their documented negative impacts on the climate, the environment and communities,” said Khevin Yu, a campaigner at Greenpeace Philippines.

A previous report by Greenpeace estimated that coal plant emissions could kill up to 2,400 Filipinos per year due to stroke, heart disease and other cardiovascular and respiratory diseases, and the Filipino public is fighting back against the construction of new coal-fired power plants.

Unhappy public

In September, the Power for People Coalition (P4P) led environmentalists, residents of coal-affected communities, church groups, and other stakeholders in holding massive protests in the Philippines – with thousands descending on Mendiola Street in front of the Malacanang to demand a moratorium on new coal plants.

Also in June, research institute Center for Energy, Ecology and Development (CEED) called on Filipino legislators to reduce the country’s coal consumption due to its harmful effects on the environment. Back in March, groups representing the country’s Catholic Church and other NGOs urged financial institutions to divest their investments in coal-fired plants and focus on renewable energy instead.

Crucially, organisations such as the P4P and CEED have asked Duterte to issue an executive order for a moratorium on new coal-fired power plants, an audit on existing ones and a clear policy to accelerate the country’s transition to renewable energy.

“We pay for coal with our money, our health, our environment, and our future. In return, we get unreliable energy and fat profits for owners of power companies. We want things to change, and we want it to change now,” said P4P Convenor Gerry Arances, who is also CEED’s Executive Director.

SRPI

In Zamboanga City in Mindanao, the Alsons Power Holdings through San Ramon Power, Inc. (SRPI) is supposed to begin construction of a 100-megawatt coal-fired power plant which was to begin operation in 2016 in Talisayan village.

But Alsons failed to start building its facility, citing many reasons for the long delay — from the failed Moro rebellion in 2013 to the P900-million enhancement program it was demanding from the local electric cooperative as an assurance it could pay them for the stable supply of electricity.

Library photo from the ‘Renewable Energy in Zamboanga City NOW’ shows environmentalists protesting the proposed coal-fired power plant in the village of Talisayan in Zamboanga City. (Ted Nace)

And environmentalists are also monitoring the proposed coal-fired power plant and they urged the Zamboanga City Council to revoke its permission for SRPI to build the power plant, saying, it will only cause pollution and damage the clean environment and pose health hazards not only to humans, but animals as well.

Last year, the City Council of Ozamiz revoked its previous resolution favorably endorsing the proposal of Ozamiz Power Generation, Inc. to build a 300-megawatt coal-fired power plant. Another resolution was also adopted and approved requesting civil society organizations and residents to look for sources and prospect investors of a cleaner and affordable renewable energy in the city.

The Climate Reality Project – Philippines said coal is a dirty fuel – from start to finish – and the process of mining coal also blasts away mountaintops and leaves all kinds of toxic slurry ponds behind.

Worldwide, more carbon pollution comes from the burning of coal than any other fuel. The Climate Reality Project – Philippines said it agrees with the report released by the Institute for Energy Economics and Financial Analysis (IEEFA) and the Institute for Climate and Sustainable Cities (ICSC) saying that “the Philippine’s financial sector is massively exposed to the imminent stranding of proposed coal plants in the country, which amount to over 10,000 megawatts or $21 billion (P1.05 trillion at P50 to $1)”.

“Prudent reform is required to level the playing field in the energy sector and to hold investors accountable for their own investment errors. The Philippines is heavily but needlessly over-dependent on coal, which is a losing gamble.

The entire nation could be locked into two decades of paying for coal power it may not end up using,” said IEEFA energy finance analyst Sara Jane Ahmed, co-author with ICSC energy policy advisor Jose Logarta Jr. of “Carving out Coal in the Philippines: Stranded Coal Plant Assets and the Energy Transition.”

Climate action with genuine political will is an effective tool to level-up, to leave dirty old coal and embrace indigenous renewables. “We recognize their commitment to catalyse a global solution to the climate crisis by making urgent action a necessity across every level of society in the spirit of fair share and climate justice,” Climate Reality Project – Philippines said.

“The Philippines has abundant sources of sustainable energy: geothermal, solar, wind and hydro – in which Filipino resourcefulness, creativity, and intelligence will guarantee a reliable and sustainable smart grid for everyone. It is, indeed, commendable that local governments and communities are acting on the Paris Agreement and sustainable development, as a whole,” it added.

In other countries, including China and the United States, coal-fired power plants are now being replaced by renewable energy sources, such as sun, wind, ocean waves and other “green” technology that leave no carbon footprints in the environment. (Jason Thomas – The ASEAN Post. With additional reporting from the Mindanao Examiner.)

 

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