THE National Renewable Energy Board (NREB), which advises the Department of Energy (DOE) on renewable energy (RE) issues, wants power firms that would be affected by the coal ban to realign budgets to finance RE projects.
NREB Chairman Monalisa C. Dimalanta said this is one way to hit the 35-percent RE goal in the country’s power mix by 2030.
“We are encouraged, of course, with the coal moratorium issued by the DOE; but we need to make sure that the financing that could have been used to build new coal plants would be actually redirected to finance and build RE plants,” Dimalanta said in an interview.
The share of renewables in the mix has declined to 20 percent at end-2019 from nearly 34 percent since the RE Act of 2008 was passed.
Dimalanta said there are indications that the share of RE in 2020 was unchanged from a year earlier. Coal, on the other hand, still dominates at 55 percent in 2019 from 26 percent since the passage of the RE Act.
First Gen Power Corp. president Francis Giles B. Puno said the coal ban would not only help attain the country’s RE goals but create new jobs as well.
“We also note that the DOE’s declaration that it will not approve new coal plant is hastening the transition to cleaner forms of energy as other energy companies declare their intention to exit from coal investments. We believe this shift to cleaner energy will create new jobs and opportunities in the energy sector,” Puno said via e-mail.
First Gen has ditched coal since 2016. It has an installed-capacity of 3,492 megawatts (MW) through its portfolio of gas and RE power plants.
The DOE, meanwhile, will soon come out with a complete list of power projects that will be covered by the moratorium on new coal power plants.
“The circular is still being edited. I approved the draft. Basically, we’re not accepting any new applications or greenfield,” DOE Secretary Alfonso G. Cusi said during an online news briefing. “What we are processing are those committed plants, those that are part of the Philippine Energy Plan.”
Cusi is also backing Dimalanta’s proposal, saying the country needs to shift to a more flexible power supply mix by accommodating the entry of indigenous and a more sustainable power source.
The agency’s Electric Power Industry Management Bureau headed by Director Mario C. Marasigan said the list may or may not include expansion projects that were already endorsed by the DOE prior to the announcement of the moratorium.
“We’re still completing simulations. We have to determine if the proposed expansion projects are really part of original plan and that these are not new projects because the intent could be just so they can be exempted,” Marasigan said.
He said the review will cover endorsed committed coal projects, the committed and indicative projects with permits, endorsements at groundworks, the expansion projects that are part of the existing plants and the indicative projects that have no movement yet.
But while the DOE has yet to release the circular, various groups urged the DOE to include all existing coal plants.
The Center for Energy, Ecology, and Development (CEED) said the DOE should also include in the coal ban the new coal projects that “have not or have barely started construction due to the pandemic and years-long resistance from impacted communities, electricity consumers, and other stakeholders.”
The CEED also wants the DOE to impose an early retirement of aging plants.
Cusi said his office is evaluating the retirement of old power plants provided that it would “match the replacement power” in exchange for retiring these plants.
“I cannot tell names yet so that they won’t be harassed. All factors will be considered; it’s not only the age,” Cusi said. “We will consider all factors. We need the power, so it cannot just be arbitrary.”
Power generation companies, particularly those that have coal plants in their portfolio, have earlier expressed full support to the DOE’s pronouncement. They, however, would rather reserve further comments until the release of the circular and its guidelines.
Many have already pledged to go green as some are already having difficulty applying for loans to finance their coal projects.
Just recently, the Withdraw from Coal (WFC) Campaign group released the results of its so-called bank-grading project.
Based on this, the WFC said 15 banks channeled $13.42 billion to coal developer companies and coal projects from 2009 to 2019.
“Philippine banks and other financiers have caused the expansion of coal in the past decade thanks to their financial services to coal developers and projects. WFC continues to urge banks to have policies and timelines to phase out coal financing,” said Bishop Gerardo A. Alminaza of the Diocese of San Carlos and co-convenor of WFC.
The group claimed that the Bank of the Philippine Islands (BPI), Banco De Oro (BDO), and Philippine National Bank (PNB) are the three top banks that financed coal projects at $3,480.86 million, $2,518.9 million and $1,607.28 million respectively.
“After several Asian countries announced the end of new coal power, regional banks are starting to follow. RCBC is the first bank in the Philippines and in all Southeast Asia to withdraw support for new coal projects. After several western banks pulled out already, Chinese and Philippine financing is the coal industry’s last resort. This could stir up the Philippine coal industry.”
However, ditching new coal is only the first step. What is needed next from the Philippine banks is a coal exit plan for their financing, using transparent criteria for a continuous coal phase-out ending no later than 2040. Only then, banks can claim to truly support the 1.5°C limit of Global Warming that was agreed upon in Paris,” said Katrin Ganswindt of German research organization Urgewald.
The WFC said it would inform the 15 banks about the result of its own study.
“It is our hope that through this initiative, we are able to assist the banks in reevaluating their responsibilities in the climate sphere and towards the Filipino public,” Alminaza said.