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Ayala power firm still bets on coal as base-load fuel

COAL would still be the country’s main source of base-load energy for the next two decades, an official of AC Energy Holdings Inc. said, but added that there is a need for the government, particularly the Department of Energy (DOE), to clarify its position on the role of coal in the country’s energy-fuel mix.

Like many others, AC Energy shares the view coal-fired power plants are still the cheapest and fastest to build in this country, amid environmental concerns raised by some sectors. It is still the most dependable source of power.

“We won’t veer away from coal,” AC Energy President Eric Francia said.

Latest data from the DOE showed more than half of the country’s power supply comes from coal- and diesel-powered plants, with more to be built. In fact, 70 percent from the 47 identified new power plants being or will be built are coal-based.

“In terms of electricity production, we have noticed a high dependency on coal, recorded at 44 percent as of March 2016. Natural gas and renewable energy [RE] supplied 22 percent and 25 percent, respectively,” the DOE said during the recent fourth Annual Philippines Power and Electricity Week.

At the same time, the Department of Energy is strongly pushing for RE.

“We believe RE has a strong potential. That’s the future, no doubt. But for a country like the Philippines, we don’t have the benefit of indigenous natural gas, other than Malampaya, which is ending its life term,” said Francia.

He said coal and RE will “coexist, at least for the next decade. “I can only see for the next 20 years to 25 years. Beyond that, I don’t know,” he said.

Francia said the role of coal in the mix must be clarified because “we are definitely getting mixed signals from different parts of the government.”

He echoed the concern of other power-plant operators that a clear policy on energy mix would guide investors on which type of power plants must be built in the future.

“That needs to be spelled out with reality in mind,” Francia said. “When you say energy mix, it must also spell out the implications. Ano ba talaga ang technology, and role and framework so that we will be properly guided?”

A “strategic” energy-mix policy is now being crafted by the DOE, following President Duterte’s pronouncement his administration will not honor the December 2015 Paris agreement on climate change, which the Philippines adopted along with 200 countries.

“The Department of Energy is formulating a strategic fuel-policy mix to propel the country’s growing economy,” Cusi said. “While we signed the Paris agreement last year, committing ourselves to limit our carbon emissions, we cannot ignore the fact that our level of economic development at this point does not allow us to rely completely on renewable-energy sources or clean energy,” the energy chief said.

“We need to build more baseload power plants while also aggressively pushing for clean energy,” Cusi said. Cusi’s predecessor, Zenaida Monsada, earlier pushed for the industry to source 30 percent of its energy requirements from coal, 30 percent from RE, and another 30 percent from natural gas. The remaining 10 percent will come from oil-based power plants.

When she was still the energy secretary, Monsada was hoping the new administration would push for the legislation of a power-mix policy.

Francia, however, believes the proposed policy doesn’t have to be legislated. “I don’t believe it has to be legislated…Executive lang iyan.”

Just recently, Aboitiz Power Corp. stressed the need for a balanced mix of power, including coal, to ensure a reliable and affordable power supply.

“Recently, there has been a lot of discussion about coal and whether we should be building additional coal capacity. However, technology and best practices of clean and responsible coal are available today. In fact, if you visit these modern coal plants, you will see that the host communities are thriving and unaffected negatively by these power plants,” Aboitiz Equity Ventures (AEV) President and CEO Erramon Aboitiz said.

AEV’s power arm Aboitiz Power supports RE. While it strongly encourages the use of renewables, “we cannot be totally dependent on them.”

RE, he said, is intermittent and dependent on the availability of the resource used, whether it be the sun, rain or wind, let alone the cost of impact.

“As a developing country sourcing about 40 percent of our power requirements from renewable sources and a carbon footprint much lower than the developed world, with a need to be globally competitive to protect our jobs and our economy, we should be careful not to get ahead of ourselves and cognizant of the increased cost in adopting renewables. Bottom line, we need to have a balanced mix of responsible power,” he said.

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