Coal power projects in PH to face headwinds

By Jordeene B. Lagare January 5, 2021
https://www.manilatimes.net/2021/01/05/business/business-top/coal-power-projects-in-ph-to-face-headwinds/822492/

COAL capacity in the Philippines is seen to further slow down in the coming years after the government announced a ban on new coal plants, Fitch Solutions said on Monday.

“We have revised our coal generation forecasts from post-2026 and now expect it to grow at a much slower rate than we previously expected,” said the research firm in its analysis.

Fitch Solutions said it is now projecting coal-fired power generation to increase by an annual average of 5.2 percent between 2020 and 2029, amounting to approximately 93.6 terawatt-hours by 2029.

In October last year, the Department of Energy said it would no longer accept new endorsement applications for greenfield coal power plants or those coal facilities that are yet to be constructed.

Energy Secretary Alfonso Cusi said last month the agency is finalizing the guidelines that would outline the scope of the moratorium on new coal power plants in the country.

Yet, Fitch Solutions said such a move would limit the amount of new coal capacity coming online towards the back end of our forecasts, after those in the current project pipeline progress.

Citing government sources, the research firm said the coal ban would cause about 8 gigawatts of pre-permitted coal projects to be suspended, although specific projects were not mentioned.

“The majority of these projects are expected to come online over the coming years, by 2026,” it added.

Its forecasts, Fitch Solutions said, are subjected to significant downside risks as coal projects continue to face very strong and increasing public opposition, including the involvement of several religious associations.

It also mentioned Cusi being “a very strong proponent for nuclear power,” seeing it as an effective strategy to reduce coal-fired generation (despite controversies within both Congress and the public), which could influence energy policy toward this direction.

Furthermore, companies including AC Energy Inc. and Manila Electric Co. signaled intentions to shift away from coal in recent months.

“That said, we still expect a significant amount of coal capacity to be commissioned over the coming decade, with the impact felt only on a much longer term,” said Fitch Solutions.

“The government has said that coal will remain the dominant generation source for years to come, with several projects in the pipeline that were already approved prior to the announcement,” it added.