Coal share of power mix seen at 59% by 2029 despite moratorium
By Angelica Y. Yang – January 4, 2021 | 7:30 pm
from Business World
COAL-FIRED POWER is expected to account for 59% of the country’s generation mix by 2029 after production at the Philippines’ sole gas field winds down, according to Fitch Solutions Country Risk & Industry Research.
The loss of supply from the Malampaya gas field will increase the Philippines’ overall reliance on coal as a cost-effective power source, outweighing the moratorium on new coal-plant construction declared by the government last year, Fitch Solutions said in a report.
According to the Department of Energy, coal-based power accounted for 44.5% of the generation mix in 2015. In 2020, 86.51% of the Philippines’ coal consumption was taken up by the power industry.
Fitch Solutions said coal remains the cheap and reliable option to power the country’s growth and help it achieve its 100% electrification goal by 2022.
In light of the depletion of Malampaya’s reserves, “we expect the Philippines’ power mix to remain dominated by coal over the coming decade, with the share of coal reaching approximately 59% by 2029, with considerable downside risks,” Fitch Solutions said.
Fitch Solutions said that power supply mix in 2029 is expected to consist of 22% natural gas, 2% oil, 7% hydropower and 10% non-hydropower renewables.
Fitch Solutions said growth in coal generation is expected to be slowed by the moratorium on new build, which will create a ripple effect down the line because of the five-year timetable for building such plants.
“We now forecast coal-fired power generation to increase by an annual average of 5.2% between 2020 and 2029, amounting to approximately 93.6 TWh (terawatt-hours) by 2029,” Fitch Solutions said.
It did not give comparative growth rates.
The main risks to growth in coal power generation are “very strong and increasing public opposition” from religious and other organizations. Increasing momentum behind climate solutions as well as the adoption of nuclear power could also be factors, it said.
In September, Fitch Solutions downgraded its forecast for the Philippines’ power consumption to a decline of 5.9% in the use of power from all sources and a decline of 14% from coal.
