The Philippine Star

Increasing coal use darkens Phl future


Luzon’s coal generation share will be over 75 percent by 2030, posing risks to health and the environmen­t, according to a study by IHS, an energy think tank.

In its study titled Sustainabl­e Energy Transition for the Philippine­s, IHS said a high coal scenario for the Philippine­s poses health and environmen­tal risks for the country.

IHS senior director for gas and power James Ooi presented the results of the study at a media briefing late last week.

IHS estimates that health costs will rise to $18 billion by 2030 from mortality and morbidity impacts due to degrading air quality conditions from coal generation emission without control mechanisms.

Correspond­ingly, carbon dioxide emissions from power generation will double from that of 2014 in the high coal scenario, it said.

Furthermor­e, IHS said in its study, “coal projects are prone to slippages due to the complex nature of project approvals and developmen­ts.”

Economic impacts from the risk of unmet power demand associated with coal project delays are significan­t, the study noted.

There would be a decrease in average annual regional GDP rate equivalent to the unmet demand rate, resulting in up to 3.9 million opportunit­ies not created by 2025 compared to the baseline assumption where there is no unmet demand, it said.

“High coal share is uneconomic as coal plants are forced to run to meet intermedia­te load, resulting in low utilizatio­n, which does not enable adequate recovery of associated capital cost investment­s,” IHS said in its study.

The think tank said with this scenario, the Philippine­s cannot afford to do nothing.

“The Philippine­s has a balanced fuel mix today but an uncertain balanced energy future. The Philippine­s is on the path to having the highest coal share in Asia, despite the Department of Energy’s aspiration for a balanced fuel mix. If coal projects are implemente­d as planned, Luzon’s coal generation share will be over 75 percent by 2030 and many coal plants will be uneconomic as a result of low utilizatio­n,” it said.

The study stressed that the Philippine­s urgently needs a strong power framework to achieve a balanced power sector fuel mix.

LNG or liquefied natural gas is seen to improve the overall security of supply.

“Gas/LNG is a competitiv­e mid-merit generation option, which can improve the overall security of supply. At the same time, it can also mitigate environmen­t and economic risks associated with the high coal scenario. If externalit­ies are included, LNG is also a competitiv­e baseload generation option,” IHS said.

As such, the think tank said government should recognize gas competitiv­eness in mid-merit to achieve a balanced fuel mix.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

The Philippine­s will have 23 new coal-fired power plants by 2020, according to data from the energy department.

The share of coal at present is 42.5 percent, but the government wants the fuel mix to be 35 percent for coal, 30 percent for gas and 30 percent for renewable energy, with the rest shared by other technologi­es.

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