DOE issues advisory clarifying moratorium on new coal projects

The Department of Energy on Monday issued an advisory to clarify the moratorium on the processing of applications of greenfield coal-fired power plants, including exemptions to address the concerns of power stakeholders.

Energy Secretary Alfonso Cusi said in a memorandum to power stakeholders dated Dec. 22 but posted on Jan. 11 that operational coal-fired power generation facilities and any of the same in the parameters listed by the DOE would not be affected by the advisory.

These include committed coal-fired power projects and operating complexes which already have firm expansions plans and land site provision.

Indicative power projects with substantial accomplishments, including signed and notarized acquisition of land or lease agreement for the project and with approved permits or resolutions from LGUs (city/municipality, province) and the Regional Development Council where the power plants will be located are also exempted from the moratorium.

The DOE issued the moratorium of endorsement of the application and development of new coal-fired power projects to support and effectively implement its policies with the aim of improving energy sustainability, reliability and flexibility by increasing the renewable energy share in the energy mix, promoting new technologies, increasing system flexibility and adhering to higher environmental standards.

The memorandum will be in effect in all grid systems starting Oct. 27, 2020.

The agency said for the past 10 years (2010 to 2019), the total installed capacity added to the grid was 9,431 megawatts, of which coal plants accounted for 66 percent. It said the generation of coal-fired power plants in Luzon was steadily increasing in the past 10 years.

The share of coal to the generation mix reached 53.2 percent in 2019, followed by natural gas at 29.3 percent and renewable energy at 14 percent. The balance of 3.5 percent comes from diesel power plants. The share of coal was at 49.6 percent in the Visayas and 68.2 percent in Mindanao.

It said the COVID-19 pandemic saw an abrupt change in electricity consumption patterns and posed a challenge in the operation of the power system with the sudden demand reduction and the affected sustained operation of base load power plants.

“There is a need to shift to a more flexible power supply mix to have a more sustainable power system that will be resilient in any structural changes in demand and will be flexible enough to accommodate entry of new and cleaner technologies,” the department said.

The agency said the period would serve as a driver for the power sector to move towards an energy transition that is envisioned to be more reliable, flexible and sustainable power system in the Philippines.

It said there was a need for the power system to respond to the changes in demand and supply and allow integration of new and emerging technologies to the grid.

“The DOE recognizes that achieving the optimal energy mix is a challenge that will always have to be addressed in an evolving system. It is important to determine the demand needed to be served, the available resources that we have, the market innovations at present and the regulations that are up to date before finding the optimal solution appropriate to a particular area,” it said.