Our coal dilemma

We have a serious power supply problem that makes potential investors flee. That’s the same power supply problem that often makes us locals unreasonably suffer.

Some of us believe we should just go solar and our problems will be over. Solar is free, free from geopolitical strains and makes us feel good to contribute to fighting climate change.

If only life is that simple!

For one thing, solar is weather dependent. We have seasons like the recent habagat with gray skies and rains for weeks. That reduces solar power production, making it unreliable as a baseload with or without batteries.

Then there is capacity factor which essentially means that when the energy department announces new 4,000 megawatts of solar capacity, that number represents the nameplate capacity (the maximum possible output under perfect laboratory conditions), but the actual continuous impact on the grid is closer to an average of 800 MW (20 percent of that total).

We may need to install up to five times more solar capacity and pairing it with large-scale or commercial storage.Less than five percent of existing utility-scale solar installations in the Philippines have battery backup.

So, it is not right for the secretary of energy to say that we have “sobra sobrang” supply to address demand. She is also ignoring the dependability of power plants, specially the older ones.

Power grids must be supported by dependable baseload plants powered by coal, natural gas, nuclear, geothermal and hydro. Geothermal and hydro and dwindling natural gas from Malampaya are all we have that’s locally available.

We don’t have too much geothermal. We currently have 2,057 MW of installed geothermal capacity. In the next five years, we hopefully expect a modest addition of 300 to 500 MW of new capacity.

Hydro is great when it is available during the rainy season. Our big dams are prioritized to provide irrigation for agriculture.

Many of our coal plants are over 20 years old and account for about 3,400 to 3,600 MW of installed capacity. DOE issued a circular banning new coal plants.

DOE has identified between 3,000 and 5,000 MW or three to five gigawatts of stalled coal power capacity that was exempted from their 2020 moratorium but yet to break ground.

Climate activists insist that the five-GW gap be aggressively filled with utility-scale solar, wind and battery storage. However, these renewable alternatives cannot yet match the steady, uninterrupted baseload reliability required to keep heavy manufacturing running around the clock without compromising grid stability.

Also, massive solar farms to fill the supply gap are even now starting to cause a land-use problem.

One estimate calls for a solar farm footprint roughly twice the size of the entire city of Manila and Quezon City combined to replace the proposed coal projects. The agricultural sector has also warned about the impact of solar farms on the country’s ability to produce food.

The right thing to do is to put up as much solar with batteries as we can without impinging on agriculture. But let us proceed with the new coal plant projects exempted from the DOE ban. It’s not one or the other.

For example, MGEN’s 1200-MW Atimonan project was originally approved as a coal plant before the 2020 moratorium but banks have refused financing.

Then there is the 300-MW Therma Visayas Inc. (TVI) expansion in Toledo,Cebu of Aboitiz Power and MGEN. Adding units to operational sites is the fastest, lowest-cost way to reinforce the fragile Visayas grid.

There are other similar projects from major players like SMC Global Power with pre-approved “indicative”coal permits across Luzon and Mindanao.

But the 3,000 to 5,000 MW of moratorium-exempt coal pipeline is paralyzed by a refusal of local banks to fund coal projects. Everyone,it seems, has become fashionably woke.

Even government-owned banks like the DBP and Landbank have similarly added newgreenfield coal projects to their “exclusion lists.”

Nothing wrong with trying to save our world.But the Philippines only accounts for roughly 0.44 percent to 0.45 percent of the world’s annual carbon dioxide (CO2) emissions, and about 0.5 percent of total global greenhouse gas emissions.

Getting the five GW of new coal power plants will add 27 million tons to the country’s current baseline of 175 million tons of greenhouse gas emissions. Because the global pool is so massive (roughly 37.5 billion tons annually), this would mathematically bring up the Philippines’ total global emission contribution by just 0.07 percent (moving from 0.45 percent to around 0.52 percent of the world’s total).

It makes more sense to take care of our economy first by assuring adequate power supply. Besides, rapid technological advances have drastically reduced coal’s potential to dangerously pollute the air.

MGEN’s Atimonan project is a good example. It uses low emission technology and carbon management strategies designed to burn coal more efficiently and capture pollutants before they hit the atmosphere.

A failure to build the planned five GW of reliable power capacity would trigger severe economic consequences, directly suppressing the Philippines’ GDP growth targets and heavily stalling poverty alleviation efforts.

Failing to provide baseload-ready power leaves the country with a massive energy deficit.

Modern economies require energy expansion to fuel economic growth. Industry data cited by PIDS shows that a nationwide power outage lasting just five hours inflicts roughly P556 million in immediate economic losses.

A permanent five-GW gap would lead to routine rolling blackouts during peak periods.Think of hundreds of billions of pesos in lost industrial output annually.

Our political leadership must make hard decisions. The government banks and the Maharlika Fund should be made to support proposals to build dependable baseload power plants. Solar and wind are nice but still variable.

But we are getting there. MGEN’s MTerra solar project, one of the largest single-site solar-plus-storage projects on earth, may prove reliable enough to support baseload needs on good sunny days.

The next dilemma will be choosing food or electricity.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco