DOE wants early retirement of old coal power plants

The Department of Energy (DOE) seeks the early decommissioning or repurposing of 20-year old coal-fired power plants with a combined capacity of 3,800 megawatts as part of the country’s transition to clean energy.

“The criteria for prioritizing coal-fired power plants are be overlayed with the potential impact on regional grids; positive fair value; going after the most inefficient and emissions-intensive plants and those situated in densely populated areas or regions with high pollution levels; and ready-to-close plants,” DOE undersecretary Rowena Guevara said.

Based on DOE records, coal plants accounted for 44.1 percent of installed capacity as of June 2023.

TransitionZero, a climate analytics not-for-profit group established in 2021, said that without early coal retirement mechanisms, the Philippines would only see the existing coal fleet retire between 2047 and 2051.

It cited a report by the International Energy Agency which suggests that  developing countries need to phase out coal by 2040 to  keep the Paris Agreement goals on track.

It said the lack of abatement measures exposes businesses to the risk of stranding due to changing regulatory, business and political climate, while exposing consumers to the impacts of high coal prices.

“TransitionZero found early coal retirement by five years and replacement with renewables could be feasible with tailored deal structures, robust selection criteria, and incentives for early movers under the Philippine Energy Transition Plan [PETP],” it said.

“The Philippine energy transition is a complex undertaking that requires evidence-based planning and policies. The recent extended blackouts in Panay have exposed the need for upgrades in the power system and a diversified energy mix,” TransitionZero Southeast Asis lead Isabella Suarez said.

“Coal plants coming offline in megawatts affect the overall stability of the system, at the expense of consumers and the economy. The Philippines will need to make critical policy decisions for the early retirement of the coal fleet to be not only feasible, but imperative for businesses,” Suarez said.

She said government initiatives, including the PETP and Green Energy Auction Program-2 “place the country in a good position to start its transition away from coal and embrace a more ambitious approach on clean energy.” — Alena Mae S. Flores