THE Philippines needs a strong policy framework to achieve a balanced fuel mix in the power sector, the global energy think tank IHS Inc. has warned, saying the current bias is towards coal-fired generators.
In an independent study to assess the power situation in Luzon, IHS has found that the Philippines is on its way to hosting the highest share of coal-fired power plants in Asia despite the Department of Energy’s (DOE) aspiration for a balanced fuel mix.
“If coal projects are implemented as planned, Luzon’s coal generation share will be over 75 percent by 2030, and many coal plants will be uneconomic as a result of low utilization,” according to the study.
The study, which was presented to the media, focused on the economic and health impact of current and future developments in the energy sector.
James Ooi, IHS senior director for Gas & Power-Asia Pacific, said there is an urgent need to come up with a strong power framework for the energy sector to alleviate the situation.
While coal is important as a reliable source of power generation, an over-reliance on the commodity creates several risks.As such the IHS is calling for policy intervention that brings into the picture the establishment of power plants that run on natural gas as a more environmentally friendly alternative.
There is an urgent need to deliver a sound, transparent and workable policy framework consistent with the Electric Power Industry Reform Act (EPIRA) to meet the objectives of a reliable, secure, sustainable and cost-effective supply in the power sector, Ooi said.
The study noted that in the face of a growing consumption-led economy, the Philippines needs more investments and a sustainable expansion across its energy value chain, particularly the power sector.
To achieve its energy sector goals, the government must come up with a power sector roadmap that points to practical steps in achieving an effective transition away from coal, the study noted.
The DOE is aspiring for balanced fuel mix in the power sector over the long-term.
The think tank said it supports the DOE’s goal of a balanced portfolio of generation technologies that leads to a reliable and affordable solution.
“There should be a clear adoption of energy mix priorities, including a role of gas, coal and renewables by all stakeholders,” the think tank added.