Investors must repurpose coal power plants–ERC

BY LENIE LECTURA – MAY 24, 2022
from Business Mirror

Following the issuance of a directive from the energy department to ban new coal power projects, the Energy Regulatory Commission (ERC) is now suggesting the conversion of coal power projects—that have yet to start construction—to gas plants.

ERC Chairperson Agnes Devanadera said the proposal will avoid stranded assets, maximize investments and avoid disincentivizing old investors who put up coal plants when the country needed them the most.

Devanadera noted that there is a growing proposal in other countries to repurpose existing coal power plants to natural gas plant. The ERC chief said it would be up to the Department of Energy (DOE) to issue a policy on this.

“Remember, when we did not have coal power plants, we convinced people to invest. And now that we are seeing that renewable energy is something that we should have, are we just going to make these investors go and not be protected? Future investors will not believe us if that’s the way we will handle.

So, my suggestion is let’s do a repurposing of coal power plants. There are new technologies. Even coal facilities can be converted and have natural gas instead of coal as fuel. We should repurpose, otherwise, we will be having stranded assets and that’s not good for investors, investment policy and consumers because we require that they be maintained well,” Devanadera said.

The DOE, she said, could hold consultations with power producers to discuss the possible conversion and cost projections.

While the DOE moratorium covers only new coal power projects, the ERC noted that there are still coal investments that are underway and possibly at construction stage already at this point.

“For those coal projects whose actual construction has not yet started, maybe we can ask the proponent to study the possible conversion of their project to natural gas project,” she said.

Based on the latest data from the DOE, the total capacity of coal power plants that will be added to the country by 2027 will reach 3,685 megawatts even with the moratorium in place.