August 22, 2019
COAL will stay as the leading source of energy in the Philippines amid the government’s continued push for renewable energy (RE), according to a unit of the Fitch Group.
In its commentary sent to The Manila Times on Wednesday, Fitch Solutions Macro Research said it forecasts coal to make up 59.1 percent of the country’s energy mix by 2028.
On the other hand, power generation from non-hydro renewables will reach 10.2 percent, the think tank said.
Data from the Department of Energy (DoE) showed that in terms of installed capacity, coal was the country’s primary source of energy in 2018 at 8,844 megawatts (MW), a 9.9-percent increase from 8,049 MW in 2017.
RE came in second at 7,227 MW last year, 2.1 percent higher than 7,079MW a year earlier.
Fitch Solutions said coal will continue to fuel developments in the Philippine energy sector despite President Duterte’s recent call to lower the
country’s reliance on coal.
“While the gradually improving environment for renewables present an upside risk to our renewables forecast, coal will still remain dominant in the Philippines’ power sector expansion,” the research firm stated.
During his fourth State of the Nation Address last month, Duterte ordered Energy Secretary Alfonso Cusi to harness more RE sources. “In this regard, I trust that Secretary Cusi shall fast-track also the development of renewable energy sources, and reduce dependence on the traditional energy sources such as coal.”
Fitch Solutions said the government will continue to lean on coal to stimulate “affordable electricity generation growth” at a pace and scale necessary to bolster continued economic growth.
The government is anticipated “to turn to coal to meet the country’s power demand surge, driven primarily by strong macroeconomic and demographic fundamentals, and government goals to achieve a 100-percent electrification rate by 2022,” it said.
Coal is still a cheaper and more reliable option as resources from the Malampaya gas field is depleted with limited scope for exploration success in alternative locations in the country, Fitch Solutions said.
Amid declining RE costs, the research company believes the intermittency and low capacity factors of wind and solar power generation means the sector will only supplement baseload resources in scaling up electricity generation.
It also cited setbacks in commissioning the first liquefied natural gas import terminal in the country.
Moreover, Fitch Solutions said several coal-fired power plants were declared as energy projects of national significance this year, including
the 2×668-megawatt supercritical clean coal-fired power plant in Mariveles, Bataan and the 2×600-MW ultra supercritical coal-fired power plant in Atimonan, Quezon.
“The government’s decision to grant 11 mining and energy companies approval to explore and develop coal blocks in February 2013 further illustrates its ambitions for the growth of the coal power segment, and this government stance has remained largely the case since,” it said.
“While growing environmental and social opposition against coal pose an increasing risk to these projects, we still expect a significant amount of coal capacity to be commissioned over the coming decade,” it added.
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