Philippines lags behind peers in swapping out coal energy

One year after its global debut in November 2021, the Asian Development Bank’s (ADB) Energy Transition Mechanism (ETM) intended to fast-track the switch from fossil fuels to clean energy has gained wider support and reached initial but tentative steps toward implementation.

However, the ETM in the Philippines remains on the drawing board, still at the stage of studying the feasibility of the early retirement of coal-fired power plants while promoting the development of more renewable energy resources.

In an update on the ETM, the ADB said the Philippines was also making preparations for the implementation of a CIF ACT program, referring to the Climate Investment Funds Accelerating Coal Transition.

Among the initial three countries that are working with the ADB on the ETM, Indonesia has gone the farthest in this effort, having launched an ETM Country Platform and securing in principle $500 million in concessional funding.

The subject of ETM efforts in Indonesia is the possible early retirement of the 660-megawatt privately-owned Cirebon-1 coal-fired power plant in West Java.

Last year when the ETM was unveiled, then Finance Secretary Carlos Dominguez III said the Philippines had a unique opportunity in Mindanao to pilot the ETM project as the government was in the process of rehabilitating the Agus-Pulangi hydropower complex composed of seven power plants.

If the capacity of Agus-Pulangi would be maximized to 1,001 megawatts, the government can proceed with its plan to gradually acquire coal-fired power plants in Mindanao and repurpose them through the ETM facility.

Data from the Power Sector Assets and Liabilities Management Corp. (PSALM) show that a rehabilitated Agus-Pulangi complex can more than compensate for 232 megawatts capacity that would be lost if PSALM retired early the Mindanao Coal-Fired Power Plant.

While this is taking time, the ETM initiative has gained a fourth ADB partner with Pakistan signing up. Pakistan has started a prefeasibility study for an ETM project.

Also, the ADB announced the establishment of an ETM Partnership Trust Fund that will provide concessional funding to support ETM activities.

—Ronnel W. Domingo