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.