Sen. Joel Villanueva wants to find out from the Energy Regulatory Commission if banks, developers and distribution utilities investing in coal-fired projects are not passing on the stranded assets to consumers.
“We want to scrutinize if these banks and financiers have looked at the likelihood of stranded assets when they provided support to these power plants in correspondence to the proper implementation of environmental regulation, including a coal tax and a more effective energy competition policy,” Villanueva said.
Stranded coal plant assets or assets that are not delivering an economic return in line with the expectations is a growing risk in the Philippines.
Villanueva cited the recent report undertaken by the Institute for Energy Economics and Financial Analysis and Institute for Climate and Sustainable Cities that explained how stranded coal assets were inevitable in the country and faced the possibility of becoming a growing material risk.
The stranded coal asset cost is already being experienced in Mindanao due to an oversupply of approximately 700 megawatts of coal and hydro in an island grid lacking national connectivity.