Indonesia has assured the Philippines of uninterrupted supply of coal for its power plants, Energy Secretary Raphael Lotilla said over the weekend.
“We discussed with Indonesia, making sure that the Philippines continues to have access to regular coal supply. Almost 80 percent of our coal supply, for our coal-fired power plants and for non-power uses, is sourced abroad,” Lotilla said.
He said of the total imported coal, 98 percent comes from Indonesia. “Indonesia reiterated to us it’s assurance that the Philippines will continue to get continued supply for its coal-fired power plants,” he said.
Lotilla said Indonesia imposed a coal export ban in early 2022 to protect its domestic market.
“They explained the reason. It was because they had a two-tiered pricing system where the prices for domestic use of coal was much lower than the export prices. So the Indonesian miners would rather sell to the international market, the export market,” the energy chief said.
“It reached a point that they were running out of supply for their domestic coal-fired power plants, and that’s why they had to impose a moratorium,” he said.
Lotilla said discussions with Indonesia also included a possible agreement or cooperation in case of coal supply constraints for the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) members.
“In other words for a BIMP EAGA member like the Philippines that is importing coal from Indonesia, we can have arrangements whenever there are constraints,” he said.
Meanwhile, Lotilla said the DOE agreed on initiating a pilot project called Brunei Darussalam, Indonesia, Malaysia, the Philippines (BIMP) Power Integration Project (PIP) to study cross-border power trade between countries.
Lotilla said the initiative would complement efforts towards realizing the ASEAN Power Grid under ASEAN Economic Community Blueprint by expanding opportunities for multilateral power trading (MPT) beyond neighboring borders.
He said the initiative would contribute towards enhancing sustainable energy security and economic prosperity through interconnectivity, taking into consideration their respective national circumstances, capabilities, and priorities.
The countries will set up the BIMP PIP Working Group, with the objective to assess the potential project and examine the technical, policy, regulatory, legal, commercial and capacity building issues, relating to cross border MPT through interconnections.