THE Institute for Climate and Sustainable Cities (ICSC) has stressed the urgency to fast track the energy transition in the country, citing overcapacity in baseload power plants and unreliability of coal power plants.
“Evidence clearly shows even before the pandemic that coal has been intermittent and unreliable. As households and the private sector struggle with the economic impacts of Covid-19, data also shows coal is the reason behind spiking electricity bills and rotating blackouts. Continuing with coal is Code Red for businesses,” said Jephraim Manansala, chief data scientist of the ICSC.
The Code Red warning was issued by the United Nations Framework Convention on Climate Change (UNFCCC) early this year.
Manansala emphasized that the Philippines has an overcapacity of baseload coal-fired power plants, yet rotating power outages were still experienced in different parts of the country years, that in turn led to significantly high electricity costs.
The coal plants in the country, added Manansala, are the cause of the rotating brownouts and high electricity cost last summer.
Historically, the ICSC cited, coal plants have not met the allowable planned and unplanned outage duration while variable renewable energy plants have consistently outperformed coal plants in terms of viability.
Manansala said since the power generation of variable RE plants coincides with the peak demand, it has historically reduced the price of electricity during peak hours by 28 percent despite accounting for only 3 percent of the energy mix.
“We need to shift from centralized to distributed generation. Centralized generation through coal is expensive, unreliable, dependent on imported fuels, and will soon be stranded assets. We have seen that the price of coal in the world market has already tripled since the start of 2020, and this just further reinforces the need for this shift to indigenous renewable energy sources to stabilize the electricity prices,” he said.
Global climate change think thank, E3G, pointed out that coal has continually proved to be unreliable and will soon be history globally. “The pipeline of proposed coal power plants has collapsed by more than three-quarters, with 1,175 gigawatts of planned projects cancelled, since the Paris Agreement negotiations in 2015, bringing the end of new coal power into view,” said E3G program leader Camilla Fenning.
‘Old world unravelling’
Deputy Speaker Loren Legarda, who opened the event, said in her keynote, “This is not the time for short-term thinking. The old world is unravelling fast. For too long we have been told renewable energy is expensive and unreliable. The reality is the opposite.”
Melissa Brown, director of energy finance studies in Asia of the Institute for Energy Economics and Financial Analysis (IEEFA), cited challenges in using fossil gas to fuel the energy transition. “Financing gas will be a heavy lift.
Although we expect fossil gas to play a part in the Philippine energy mix, it is not an inevitability. Gas is very significantly expensive and with prices extremely volatile, it may be unmanageable if the power sector is not ready,” she said.
AC Energy President Eric Francia, Management Association of the Philippines Energy Committee Chair Ernesto Pantangco, and Negros ENGINE Institute Senior Advisor Marlon Apañada also joined the discussion as reactors.
“Striking the right balance is crucial in this energy transition, and we need to recognize that it will take time. AC Energy is committed to net zero emissions by 2050 and we gear our generation portfolio towards renewables,” said Francia.
He also cited the importance of having a competitive power market. “We hope to make full use of the Electric Power Industry Reform Act [Epira] and RE policies. There are still some gaps in the implementation. It just needs execution, and the market will step up to the plate,” Francia added.