THE Philippines must pick up the pace of its transition to clean power if it wants to make unacceptably risky for developers to build facilities running on fossil fuel, according to energy industry experts.
With renewable power now making up most of the Philippines’ new generating capacity, the risk grows for builders of baseload coal-fired plants, whose facilities could become stranded assets over the next decades, according to Alberto R. Dalusung III, the energy transition advisor of non-profit group Institute for Climate and Sustainable Cities.
“We have to move quickly and recognize that the (energy) transition is happening,” he said in a virtual briefing.
In 2019, President Rodrigo R. Duterte ordered the Department of Energy (DoE) to accelerate the development of renewable energy. The department nevertheless maintained its technology-neutral stance in augmenting power capacity coming from various resources — from dirty ones to cleaner sources.
The grid is now being increasingly powered by clean energy, while the use of coal is dwindling, Sarah Jane Ahmed of the Institute for Energy Economics and Financial Analysis (IEEFA) noted.
“I believe we already are and we see many transitions taking place. We’re seeing a transition in island grids to micro-grids with a portfolio of energy, including renewables. And on the main grid, we’re seeing that coal utilization rates are going down because of renewables coming onto the grid,” the analyst said.
“It is important that the government and the regulator get in front of this to help the country navigate this transition,” Ms. Ahmed added.
Electricity tariffs in the Philippines are among the most expensive in Southeast Asia, IEEFA said. It blamed this on inflexible contracts with baseload fossil fuel-fired plants.
In 2019, coal still accounted for 10,417 megawatts (MW) with renewable power at around 7,400 MW or 29% of the total, which the DoE said is well above target for clean energy in the region. — Adam J. Ang