MVP says coal stays as base load option

Tycoon Manuel V. Pangilinan, who sits as chairman and chief executive officer of the Manila Electric Co. (Meralco), is open to building new conventional plants, including coal-fired ones, should the government alter its current energy trajectory in response to the urgent need for increased capacity.

“Whether it be coal or gas, again, there’s got to be some guidance given to us as to where we should turn. Because the newest capacities, they’re small capacities,” Pangilinan said in an interview on the sidelines of the Meralco financials briefing on Monday.

“You have to turn to conventional power plants. Either by coal or by gas. It moves all of us to build more plants. It’s as simple as that, isn’t it? Except, we have to get together and map out the new studies so that we avoid the consequences that we see now,” he added.

Conventional fuels such as coal and gas remain to be an indispensable source of power as they remain a cheaper alternative to baseload supply. Unlike renewable energy, this type of baseload is available all day round. 

“These renewables are small. And they’re dependable capacities. The real output is much lower than what they suggest. So, nominally, they look formidable when you have some demand but when you get it to real output, it seems quite low,” Pangilinan said.

Power demand rising fast

The successive issuance of power alerts, which puts the country’s power service in peril, has prompted the call for additional power supply. 

On Monday, the National Grid Corporation of the Philippines placed the Luzon and Visayas grids under yellow alert for the tenth time this month as supply remains thin. 

Meralco, through Atimonan One Energy Inc., or A1E, a subsidiary of its affiliate Meralco PowerGen Corp., had proposed a 2,400-megawatt (MW) liquefied natural gas power (LNG) facility in Atimonan, Quezon. 

The entire project, to be built in two phases of 1,200 MW capacity each, was initially estimated to require an investment of P175 billion.

A1E was supposed to start with the construction of the power project last year but it did not proceed as planned.

The first phase of the project was originally scheduled to be finished by the first quarter of 2026, while the second phase is likely to take three years or by 2029 to complete.

Previously, A1E targeted building a highly efficient 1,200-MW ultra-supercritical coal-fired power plant with low emissions in Atimonan.

However, the project did not come to fruition due to opposition from environmental groups and the lack of a power supply agreement.

As a result, the environmental compliance certificate for the transmission line that was issued for the previous coal plant on 27 May 2016 will be amended for the newly proposed project in Barangay Villa Ibaba.

In 2020, the Department of Energy (DoE) declared a moratorium on greenfield coal power plants to support the shift to a supposed more flexible power supply mix. 

The DoE, then led by former Secretary Alfonso Cusi, said the moratorium aids the establishment of a power system flexible enough to accommodate the entry of new and cleaner indigenous sources. 

Amid a seemingly aggressive drive to promote clean energy sources, coal still took up 43.9 percent of the entire on-grid installed capacity of 12,406 MW in 2023. 

Off-grid, the total installed capacity reached 684.666 MW. Of this, coal’s share was 2.2 percent.