Government mulls shutdown of coal mines, coal plants

MANILA, Philippines —  The Marcos administration is exploring the possibility of a nationwide shutdown of coal mines and power plants amid the country’s bold energy transition push, according to an energy official.

Michael Sinocruz, director at the Department of Energy (DOE), said the agency has partnered with the United Nations Office for Project Services to study the impact of the closure on the economy and the country’s power supply.

“So it (study) may start next year. I don’t know how long it will take to conduct the study,” Sinocruz said yesterday on the sidelines of the 2025 Philippine Energy Transition Dialogue.

He said the study would assess all coal mines and coal-fired power plants in the country, focusing on the effects of their shutdown on workers and host communities.

“Part of the study should be how much money or funding do we need to protect this possible displacement of workers and even the livelihood of the community,” Sinocruz said.

The DOE, Sinocruz noted, plans to engage with coal mining companies once the study is completed.

“Based on this study, we can have or probably recommend policies for consideration of the DOE or by the national government, providing alternatives for those that will be affected by this transition,” he added.

While backing the DOE’s energy transition efforts, Consunji-led Semirara Mining and Power Corp. (SMPC), the country’s leading coal producer, stressed the need for “careful study, timing and planning” in any coal phaseout.

“For now, coal remains the backbone of our baseload supply, ensuring affordable and reliable electricity,” the company said when asked for comment.

“We trust that the transition will be managed in a way that balances sustainability with the country’s energy and economic needs,” SMPC said.

In terms of power generation, coal still makes up the majority of the energy mix at 62.5 percent, with renewables only accounting for 22.2 percent, latest DOE data showed.

In a bid to shift away from coal plants, the government implemented in 2020 a coal moratorium, which bars the processing of new coal facilities.

The DOE, however, clarified that the coal policy is not a “total ban,” as it does not cover existing and operational coal plants or those that are already committed.

Sought for insights, economist Bienvenido Oplas Jr. said the wind-down of coal assets could lead to “high inflation and blackout economics.”

“Reduced, if not near zero, coal means a reduced share of cheap, stable electricity and a rising share of unstable, unreliable, undependable and non-dispatchable on-demand electricity from intermittents,” Oplas said.

Coal plants are regarded as a reliable source of baseload power due to their capacity to operate continuously and provide an uninterrupted supply of electricity.