Coal to remain dominant in PH energy mix

Coal-fired power plants are expected to continue to account for a significant share in the Philippines’ energy mix until 2020 despite strong headwinds from government and civil society.

According to a paper from Energy and Natural Resource Market Reports, coal’s share will remain high at about 32 percent of total energy consumption even amid strong opposition from environmentalists.

Consumer welfare advocates as well as electricity industry players have also warned of rising power costs due to increases in the excise tax on coal.

The Tax Reform for Acceleration and Inclusion (TRAIN) law raises the tax on coal from P10 per metric ton previously to P50 per ton this year. The coal tax would rise further to P100 per ton in 2019 and to P150 per ton in 2020.

The Poland-based research firm said the Philippines would replace imported coal used in power generation with local output thanks to increased production from the Visayas and new mines in Mindanao.

The company took note of production in Semirara Island in the Visayas, where Semirara Mining and Power Corp. was undertaking efforts to increase coal output by one-third in volume to reach 16 million metric tons in the next two to three years.

“The Philippines will gradually reduce its dependence on imported energy, as petroleum products from overseas decline in importance in its energy mix and as the country makes more use of locally available fuels,” the report said. “Fossil fuels will remain the Philippines’ main source of energy, but the country will also continue to exploit alternative energy sources.”

In a separate report, United Kingdom-based consultancy Wood Mackenzie said coal-fired power projects were expected in the next two decades to maintain dominance in the energy markets of emerging economies in Asia.

Wood Mackenzie said emerging markets in Asia were expected to attract a total of $250 billion worth of investments in coal-fired power over the next decade.