If we’re to believe what the environmentalists are saying, we should close down all power plants running on coal and natural gas because they are pollutants and, instead, build new ones relying solely on renewable energy (RE), such as solar and wind power.
But is that a realistic proposition? Or will it only plunge us into a new Dark Age of even more expensive electricity at this time?
Considering that clean energy is still expensive at present and we face financial constraints as a developing country, the Duterte administration has to come up with a practical mixed-energy use policy that requires the presence of both baseload plants, such as those running on coal and natural gas, along with renewables, as we navigate the transition to a low-carbon economy to protect the environment.
New Energy Secretary Alfonso G. Cusi has indicated that he would aim for reliable, steady and affordable power supply and greater energy self-sufficiency to help achieve the national government’s agenda of sustained economic growth in the next six years.
“Coal is the more dependable, the more reliable source for baseload. As a developing country, we have to find a happy balance. We cannot afford to rely solely on renewables,” Cusi said. He is right.
Thus, the Duterte administration is likely to retain coal as an integral part of the country’s electricity-generation mix while expanding the use of renewables. This combination of coal, renewables and alternative power sources would ensure adequate and stable electricity supply while keeping rates within the reach of consumers.
The Department of Energy under the previous administration pursued a 30-30-30 energy mix of coal, natural gas and RE, with the remaining 10 percent for other technologies. But the Climate Change Commission frowned on coal-power generation as part of government efforts to cut greenhouse-gas (GHG) emissions by 70 percent by the year 2030, under its commitment to the United Nations Framework Convention on Climate Change.
A developing economy, like the Philippines, however, cannot make a drastic shift to expensive renewables at the expense of available, reliable and affordable sources, like coal.
Sustained Philippine economic growth requires a rapidly increasing demand for energy. The country’s power demand could double to 20,000 megawatts (MW) to 24,000 MW in the next 15 years, if the economy continues to expand by at least 6 percent per year.
Mindanao requires an extra power capacity of 500 MW this year, another 500 MW by 2020 and 1,600 MW more by 2030. New power-generation facilities are expected to provide a total capacity of 720 MW this year and another 550 MW in 2017, but most of these plants will be coal-fired.
The Duterte administration’s economic agenda seeks to create other growth centers in the countryside. With the projected requirement of an additional 10,000 MW to 12,000 MW between now and 2030, the government cannot afford to ditch plans to build and operate coal-fired power plants, unless we are prepared to deal with a devastating energy shortage.
Coal power, in fact, is readily available and remains the most affordable option at present. This energy source is highly efficient and cost-effective, and utilizes clean technologies favored by such countries as Finland and Germany.
The Philippines has one of the highest electricity rates in Asia. This is one of the reasons foreign investors are reluctant to come in. As we transition to an industrialized economy, we have to fully utilize coal and other traditional sources of energy that comply with global environmental standards.
Coal-fired power plants undergo a rigid process of approval. Before they can secure an environmental compliance certificate (ECC) and other permits, they must go through a tedious process that includes consultations with the community to address their concerns.
RE sources also depend on weather conditions, which compromises the availability of supply on a 24/7 basis. At this point, baseload plants, powered by coal that are available on demand, can provide industries with a reliable, continuous supply of power. With renewables still in the early stages of development in the Philippines, electricity prices will certainly double if the country uses renewables, such as solar and wind power, as its primary energy source.
Expensive RE sources at the expense of cheaper coal entails not only economic costs, but also social ones.
Prohibitive electricity prices mean increased production and distribution costs for manufacturers and producers of basic goods. And manufacturers will pass on their rising overhead costs to consumers. The number of jobless Filipinos will multiply as factories downsize to cope with escalating production expenses.
High-power rates would have an adverse impact on the poorest of the poor, as well as on the low- and middle-income consumers.
Beyond this, foreign investors will park their money elsewhere and choose other countries where power costs remain manageable and energy supply is sufficient and reliable.
A drastic shift to RE at this point, we repeat, is not a prescription for sustained economic growth but a step backward.
The Duterte administration will be unable to bring inclusive growth to the countryside if it allows an abrupt shift to RE as the country’s main source of power supply.
We may have to continue traditional energy sources, like coal power, until renewables become widely available and affordable. In other words, we should go “green” only when we are really prepared for it.
E-mail: ernhil@yahoo.com.