Lately, the debate on the rate of abandoning coal to generate electricity has intensified, triggering questions about the moratorium on the use of conventional fuel.

While the country takes the necessary steps towards green energy, the preferable pace is a gradual transition since coal remains the most reliable and affordable source of electricity.

DivinaLaw senior partner Jose Layug, who is a power law expert, said the Department of Energy (DoE) has taken steps to ramp up the adoption of renewable energy (RE) but the transition considers the rising demand for electricity as the economy continues its upswing.

Layug said in a commentary in the Asia Business Law Journal that in two years, the DoE has fast-tracked the RE programs and is engaged in implementing the National Renewable Energy Program (NREP).

“The government is fully conscious that the transition away from conventional fuel will have to be calibrated,” according to Layug.

He cited the intermittence and variability of RE and the high cost of battery storage as other reasons for DoE to calculate its approach to increasing renewables in the diverse energy mix.

Under the moratorium on new coal projects, generation companies that obtained permits for developing or expanding their facilities before the policy’s implementation in 2020 were allowed to continue with their projects.

The DoE said the moratorium on coal does not imply the complete elimination of the power source.

Layug cited provisions of Item 2 of the coal moratorium policy which cover existing and operational coal-fired power generation facilities, committed projects, existing power plant complexes with firm expansion plans and land site provisions, and indicative power projects with substantial accomplishments, including signed land acquisition or lease agreements, approved permits, and resolutions from local government units and the Regional Development Council.

Developers also have the option to seek a certification from the DoE Power Bureau confirming that their projects fall outside the scope of the moratorium.

An expanding economy needs power

Energy Secretary Raphael Perpetuo Lotilla deems including coal in the current energy mix crucial for growth.

“Diversification is critical to energy security. Unfortunately, we get pilloried for favoring solar and wind over coal and get charged for favoring coal over renewable energy. This leaves us with a reassuring feeling that we are getting the damn thing right,” Lotilla said.

In 2020, the DoE imposed a moratorium on building new coal power plants to facilitate the transition to a more adaptable mix of renewable energy sources.

Over the years, coal has dominated the energy mix in the Philippines, providing 59.6 percent of the total electricity generated in 2022.

When the price of coal reached $450 per ton in 2022, the average annual price in the Wholesale Electricity Spot Market went as high as P10.66 per kilowatt-hour.