Not so coal

The push for energy security is fast shaping up to be the first litmus test for Senate President Chiz Escudero which he brought on himself following his controversial comment about the possibility of ending the moratorium on coal.

The previous regime implemented a ban on new coal power plants but existing facilities that were already online were not covered.

The new Senate chief’s comment stirred a hornets’ nest as environmental groups are up in arms, saying the viewpoint sets back the progress towards renewable energy (RE).

Gerry Arances, convenor of the Power for the People coalition, sharply criticized Escudero, saying he was lying with his call, which the senator tried to support by claiming that renewable energy is more expensive than coal.

“Like all fossil fuels, coal is expensive and unreliable. 2023 data from Meralco showed that generation charges from coal cost higher than RE,” Arances countered.

Escudero’s claim that coal-generated electricity costs only P2 to P4 per kilowatt hour while renewable energy costs P6 to P10 sparked the uproar among groups pushing for green technology.

Energy Assistant Secretary Mario Marasigan said the ecology groups are correct. With the increased cost of coal in the international market, coal now costs more than P5 per kilowatt hour in terms of electricity generated.

Geopolitical conflicts have greatly impacted coal, elevating its cost to about four times the original price.

The distribution utilities were affected as fuel costs are usually passed through to consumer bills.

Immediately after the Ukraine conflict started, electricity rates zoomed to about P18 per kilowatt hour, particularly because of the coal contracts. “So that’s the impact on international prices,” according to Marasigan.

At the moment, coal may still be the cheapest source of fuel for electricity but natural gas remains competitive.

Marasigan said that weighing the benefits, there is an advantage in using natural gas since aside from being cleaner than coal, generation facilities using the fuel are relatively flexible which can support the variability of renewable energy (RE).

“If the RE source is not available, natural gas can easily fill that gap,” he said.

According to the energy official, imported liquefied natural gas (LNG) was introduced to back the policy to build up power generation capacity while not immediately transitioning from coal to other technologies.

Natural gas is considered a transition fuel to pave the way for RE to become the main source of electricity.

The plan for indigenous natural gas is to continue its exploration which was the reason the government extended Service Contract 38 up to 2039 to ensure that “we can optimize the remaining gas reserves within the Malampaya field.”

Exploration will have to be undertaken to discover new sources of natural gas and allow the power plants to continue operating, and even expand the exploration should there be more LNG downstream facilities, Marasigan said.

Natural gas-fired power plants used to supply 30 percent of the electricity demand in Luzon but this has dropped considerably with the reserves running out.

According to Marasigan, the Philippine Energy Plan entails that by 2040, RE will comprise 50 percent of the energy mix. There will be developments in natural gas and even nuclear power by then.

Marasigan said that by that time, new technologies may emerge that will make the use of coal far cleaner than now.

Our indigenous fuel reserves remain lower than our neighbors’ but he said the geology of the Philippines brings hope of potential huge resources waiting to be discovered.

It would be good for the DoE to give Chiz a lecture on the energy roadmap to prevent him from shooting himself in the foot hereafter.