‘Government should exempt SPUG areas from coal moratorium’
By Lenie Lectura – September 11, 2024
from Business Mirror
A top official of Consunji-led DMCI Power Corp. said coal-fired power projects that will serve off-grid areas should be exempted from the coal moratorium policy of the Department of Energy (DOE).
“I think the moratorium should not include the SPUG [small power utilities group],” DMCI Power Chairman Isidro Consunji said on Monday night.
SPUG power plants mostly operate on diesel which, according to Consunji, is more expensive than coal.
“(Coal) is the cheapest fuel. If you want, don’t add more coal plants but don’t kill them either,” he said when asked if the Consunji group is open to adopting the Energy Transition Mechanism (ETM).
ETM is a concept pioneered by Asian Development Bank during COP26 in November 2021 to initiate a secure and cost-effective phase-out of coal-fired power plants to accelerate the transition from coal to clean energy in Southeast Asia.
DMCI Power operates a number of coal plants all over the country, including the 15-megawatt (MW) coal plant in Masbate.
“Like in Masbate, our rate is about P9 (per kilowatt hour) while diesel is about P23. Don’t prohibit coal. You can do that for on-grid areas but not for off-grid because people will suffer. Instead of paying just P9 or P10, they will pay P23,” said Consunji.
DMCI Power has a consolidated installed capacity of 148MW located across Masbate, Palawan and Oriental Mindoro. Its energy portfolio includes diesel, bunker and thermal.
The company was established in 2006 to energize the small and remote islands in the country that are not connected to the main power grid. It is currently the biggest off-grid power provider in the Philippines.
The DOE’s moratorium policy for new coal power projects was issued in 2020. All coal power plants of the Consunji group started commercial operation before the policy took effect.
“For us, the DOE already pre-approved our coal number 2 in Palawan before the moratorium so that will proceed. But I think after that, if there are no changes in the policy, then there will be no new (coal power projects). Poor SPUG, they are the ones who don’t have money, but they are the ones who will pay more,” said Consunji.
He was referring to theP1.5-billion thermal power plant in Palawan which started operations in August 2023.
Last July, the DOE clarified that the policy is not “a total ban.”
In particular, the DOE said it does not cover existing and operational coal-fired power generation facilities as well as any coal-fired power projects considered committed power projects; existing power plant complexes which already have firm expansion plans and existing land site provisions; and indicative power projects with substantial accomplishments, particularly with signed and notarized land acquisition or lease agreement for the projects, and with approved permits or resolution from local government units and the Regional Development Council where the power plants will be located.
The DOE can issue, at the request of a project proponent, a certification that a project is not covered by the moratorium. Several proponents of coal-fired power projects have already requested the DOE’s confirmation on non-coverage and these were issued after verification.
“Diversification of energy sources is critical to energy security. Unfortunately, we get pilloried for favoring solar and wind over coal and get charged for favoring coal over renewable energy. This leaves us with a reassuring feeling that we are getting the damn thing right,” DOE Secretary Raphael Lotilla said.
