Philippines coal-fired power plants are an integral component of the country’s energy mix, meeting much of their energy demands while neglecting efforts to diversify and increase renewables in their grid. However, the local coal supply isn’t enough to satisfy the demand, forcing the government to import the fuel. Indonesia ensured they would provide PH with a steady supply of coal.
Stable Coal Supply for the Philippines
Coal has long been used as a reliable fuel source in power plants due to its relatively low
costs and abundance. The Philippines looks to coal as an inexpensive fuel to run its power plants. When burned for energy production, its chemical energy is converted to electrical current through several processes.
According to Energy Secretary Raphael Lotilla, Indonesia ensures that the Philippines will have continuous access to regular coal supply. Nearly 80% of PH’s coal supply to run coal-fired power plants, including non-power utilisation, came from overseas.
Indonesian coal comprises 98% of the Philippines’ total imported coal. The neighbouring Asian country echoed its commitment to provide PH with a stable coal supply for its coal-fired power plants.
“They explained the reason. It was because they had a two-tiered pricing system where the prices for domestic use of coal were much lower than the export prices. So the Indonesian miners would rather sell to the international market, the export market,” said the energy chief.
He added that Indonesia had a two-tiered pricing system. The prices for domestic coal use were much lower compared to export prices. That’s why Indonesian miners would rather export their coal than sell it locally.
Additionally, it came to a point where they experienced a depletion of the local coal supply. Due to this, the Indonesian government imposed a restriction on coal exportation.
In January 2022, Indonesia carried out a month-long ban on coal export due to a lack of supply for domestic use. The government-owned electric company complained that it was getting a deficient power supply.
Not Yet Ready to Withdraw from Coal
The Philippines seeks to boost its share of renewables in the energy mix from 22% to 35% by 2030 and 50% by 2040. However, the country couldn’t shut down its coal plants. Not just yet. Coal constitutes almost 60% of the total 28.3 gigawatt available power capacity throughout the country.
In 2021, the Philippines imported 31.24 million metric tonnes of coal. Indonesian coal comprises 30.6 million metric tonnes.
Coal may be an economical and sustainable energy source, yet its carbon emissions pose
serious environmental concerns. Many countries are working toward transitioning
away from coal towards other forms of cleaner and more eco-friendly energy. It includes natural gas or renewables to address climate change and lessen air pollution.