Coal here to stay, says DOE chief

By: Daxim L. Lucas - November 17, 2016

http://business.inquirer.net/219665/coal-here-to-stay-says-doe-chief

Coal-fired power plants will remain a permanent fixture—despite the strong lobby against them by environmentalists and proponents of other energy sources—because these could help the Philippines rapidly meet its growing energy needs cost-efficiently, the Department of Energy said Wednesday.

At the same time, however, policy makers recognized the legitimate concerns of coal power’s opponents and vowed to balance the concerns of all stakeholders in the country, according to Energy Secretary Alfonso Cusi.

“The signs of the times seem to tell us that coal is here to stay,” he said in a speech delivered at the 2016 Coal Business and Policy Forum in Makati City, even as the energy chief stressed that the implementation of coal energy policy “must be done right” to address the criticism being leveled against it.

 “One quarter says that ‘clean coal’ is the wave of the future, the game-changer in the coal-fired power industry,” Cusi said. “However, another quarter argues the opposite; that it is not only a total misnomer, but is utterly impossible.”

Data from the Department of Energy showed that coal power provides the single-biggest source of electricity for the country today. As of 2015, 45 percent of the Philippines’ generated electricity came from coal—a sharp rise from the 1-percent share it had when the country first began to use coal as a power source in 1981.

“And with new coal-fired power plants in the offing, the figure is expected to increase, or at the very least, remain so for a considerable period,” Cusi said.

The energy chief noted, however, that the energy and environmental landscape has changed dramatically in the 35 years since coal power was first adopted locally.

“Growing concerns about the environment and climate change have triggered public clamor for clean and sustainable energy. As a dutiful member of the international community, we have pledged to actively contribute to the cause of climate change mitigation,” he said.

“But then again, our country’s social and economic circumstances have also changed,” he added. “We are beset by the twin problems of high electricity costs and a growing demand that far outpaces our generation capacity.”

At the same time, coal prices have gone down on the international market and the bullish expectations in the US of a resurgence of its coal industry due to recent political developments might push prices even lower.

“Because of all these, we ineluctably find ourselves caught between the horns of an ‘energy trilemma’,” Cusi said. “We grapple with the difficult task of trying to find the balance among the equally pressing demands of energy security, environmental sustainability and economic competitiveness.”

A key hurdle for the coal power industry, however, is Environment Secretary Gina Lopez, who has voiced her opposition to what she described as “a form of energy that has no future.”

Coal power is also being opposed by another major player in the industry, First Gen Corp., which is controlled by the Lopez family from which the environment chief hails. First Gen’s largest generation plants are powered by natural gas, which is the closest rival to coal—albeit slightly more expensive—in terms of cost structure.

Cusi said he believed, however, that coal has a role to play in the Philippines’ so-called “energy mix,” especially in providing cheap and reliable baseload power amid the country’s steadily growing electricity needs.

“[This] highlights the importance of a conscious and continuing pursuit of that wholesome balance that we desire: A perfect policy coupled with a sound economic logic,” he said.