Groups laud ban on new coal plants, hit geothermal ‘sellout’

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Energy Secretary Alfonso Cusi (FILE PHOTO)

Metro Manila (CNN Philippines, October 29) — There will be no new coal power plants in the country following an unprecedented moratorium issued by the Department of Energy.

The government announced the policy shift on Tuesday but has not released a copy of the DOE circular imposing the ban on greenfield coal power plants, or those involving new and untapped areas.

In a statement on Thursday, the think tank Center for Energy, Ecology, and Development said nine coal projects with a total capacity of 5.6 gigawatts will be shelved because of the moratorium. CNN Philippines has reached out to the DOE to confirm the data.

“CEED celebrates this development, which signals the country’s first step in exiting coal,” the group said in a statement. It also urged the government to further expand the ban to cover coal projects that have not achieved progress due to the pandemic, as well as resistance from affected communities and stakeholders.

The moratorium, while praised as a positive development in the push for renewable energy, is supposedly tainted by a controversial policy allowing foreign companies to fully own and operate large-scale geothermal projects, advocacy groups said. These include geothermal exploration, development, and utilization projects with an initial investment cost of about $50 million.

READ: Energy chief orders fast tracking of renewable energy program

Multi-sectoral group Sanlakas said the prohibition on new coal power plants seems to have been used to “to mask the extent to which our national patrimony would be mortgaged to foreign interests.”

“Opening up the country’s natural resources through 100% full ownership of large-scale geothermal exploration, development, and utilization projects not only violates the Constitution, it is also selling out our sovereignty,” said Aaron Pedrosa, secretary-general of Sanlakas.

The Constitution requires 60 percent of a public utility to be owned by Filipinos, but the DOE maintains that geothermal energy, which it considers a mineral resource, is exempted from this rule. These projects need to be approved through a financial and technical assistance agreement between the government and foreign contractors, the department said.

A draft obtained by CNN Philippines containing guidelines for the third Open and Competitive Selection Process in the awarding of renewable energy service contracts, provide for a P100,000 application fee per geothermal project.

CEED said these projects should be limited to Filipino corporations, noting how local communities have suffered while foreign mining companies take profit. It would also be more difficult to hold foreign companies accountable, Sanlakas added.

Power prices likely unaffected

The Power 4 People Coalition expressed reservation that the move away from coal, the main power source, could put pressure on electricity rates.

However, the Bangko Sentral ng Pilipinas said the decision to reject new coal projects is unlikely to affect power prices and overall inflation anytime soon.

BSP Deputy Governor Francisco Dakila, Jr. said that while fluctuating power prices are seen as a risk that may push the cost of basic goods up, price trends depend more on events which "happened quite a long time ago."

"Although it's an upside risk, it's not really that significant," Dakila said in a media briefing, adding that the impact of COVID-19 to the local and global economy would outweigh the potential impact of DOE's move.

BSP Department of Economic Research Director Dennis Lapid added that the economic slump will likely keep power demand low and energy supply ample despite a possible decline in electricity supply as no new greenfield coal projects can proceed. "This is something that we will continue to monitor," he added.

CNN Philippines' Melissa Lopez contributed to this report.