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The move could eliminate 8GW of planned coal projects that have not been fully approved, sending a strong signal to investors in the region that coal is out of favor.
The Philippine government will no longer accept proposals to build new coal-fired power plants, in a significant policy change designed to boost the deployment of renewable energy.
Energy Secretary Alfonso Cusi announced that the country will declare a moratorium on brand-new new coal power plants in a speech during Singapore’s International Energy Week on Tuesday.
“As the Philippine Department of Energy reassesses the adequacy of our current energy mix against our energy goals, I am optimistic this would lead to more opportunities for renewable energy to figure prominently in our country’s energy future. .
“We are also promoting the transition from the use of technology based on fossil fuels to cleaner energy sources to ensure more sustainable growth for the country,” he said.
Activists have hailed the decision as a “welcome step” for the Philippines, where coal accounted for nearly half of electricity production in 2019. A 12 GW pipeline of new coal projects in various stages of construction and planning would have more than the country’s production doubled. coal capacity.
Of those 12 GW, the moratorium is likely to end 8 GW of pre-permit coal projects, according to Global Energy Monitor data analyzed by think tank E3G. The government has yet to clarify what plans the ax is expected to tackle.
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“The announcement is important because it is an open statement about the kind of foreign investment the government wants to attract,” Red Constantino, executive director of the Philippines-based Institute for Climate and Sustainable Cities, told Climate Home News.
“It is a direct signal to the investment community both at home and abroad that the Philippines wants… flexible renewable energy. It’s a very exciting time, “he added.
Although it is not listed as a climate policy, Constantino said the decision would put the Philippines “on the path to decarbonization.” “It is not going to be enough, but it is a big step in the right direction,” he said.
Sara Jane Ahmed, a Manila-based energy finance analyst for the Institute for Energy Economic and Financial Analysis (Ieefa), told Climate Home that Southeast Asia and South Asia had long been “the last strongholds of the growth of coal ”.
“This is a clear indication that the Philippines is now modernizing its energy system. This moratorium is a sign that politics will no longer shore up the bad economy. Coal players looking to sell outdated coal technology to developing countries abroad will have to look elsewhere, ”he said.
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In a statement, the energy department said the decision was aimed at building a more flexible power supply mix that could be “resilient to structural changes in demand … and accommodate the entry of new cleaner technological innovations. and indigenous “.
The Philippines relies on a particularly inflexible power grid that relies heavily on large coal plants to provide grassroots power, making it difficult and expensive to take coal plants offline to adapt to changing demand.
This has led to regular power outages and increasing disruptions in the energy sector. The coronavirus pandemic exacerbated the problem as coal was hit the hardest by the collapse in demand, while renewables were better suited to fluctuating needs.
Climate predictions of more frequent and intense extreme weather events, such as typhoons, also point to the need for a more flexible energy system.
Constantino said observers expected the government to announce the modernization of the power grid before the country entered the lockdown.
“The pandemic delayed that decision but also affirmed it: what they wanted to do before Covid-19 became even more critical. The myth of coal being more reliable is over. “
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With falling prices and improving storage technology, the government hopes to increase renewables in the power mix and help reduce the high cost of electricity. Discussions on importing natural gas are also expected to be finalized this year.
At the same time, the government wants to encourage foreign investment in large-scale geothermal projects by announcing a relaxation of the rules on foreign ownership limits.
Since the moratorium on new coal-fired power plants is a temporary measure, activists are calling on Manila to adopt a more permanent policy to halt development of coal.
“We want the government to completely halt the expansion of the coal industry, and eventually we would like to see a phase-out plan,” Lidy Nacpil, coordinator of the Asian Peoples Movement on Debt and Development (APMDD), told Climate Home. Gas should not be used as a transition fuel.
Nacpil added that the importance of the announcement will be judged by what the moratorium covers, calling for all new coal plants in process to be scrapped.
