The Department of Energy (DOE) has appealed to Indonesia to lift its coal export ban which is feared to affect local power supply and could force the country to buy from more expensive sources.
Indonesia, the world’s biggest exporter of coal, has suspended exports until the end of the month to prioritize stockpiling inventory for local use and prevent widespread power outages.
The Philippines’ move follows similar requests from other Asian governments such as Japan and South Korea.
The DOE in a statement said Secretary Alfonso Cusi has asked the Department of Foreign Affairs (DFA) to intercede and appeal on behalf of the Philippines through the Asean cooperation mechanism.
The DOE said Cusi furnished DFA with a copy of his letter to Arifin Tasrif, Indonesia’s minister of energy and mineral resources, last Thursday to appeal for the lifting of the coal export ban.
In his letter, Cusi cited the healthy economic cooperation between the Philippines and Indonesia and that Indonesia’s recent policy will be detrimental to economies currently relying on coal-fired power generation like the Philippines.
Cusi added in 2021 alone, the Philippines sourced an average of 2.3 million metric tons (MT) per month from Indonesia to fuel the country’s coal-fired power plants.
The DOE said the Electric Power Industry Management and Energy Resource Development Bureaus are scheduled to meet today with the country’s coal power plant generators to discuss potential strategies.
Reuters reported that Indonesian authorities will decide within the week if the ban will be lifted at the end of the month or will be extended.
The last time Indonesia implemented a coal export ban was in 2016 due to issues in the safety of supply routes that are infested with pirates and armed groups.
The Manila Electric Co. (Meralco) said three of its power suppliers — which supply 965 megawatts (MW) capacity to the company – will be affected.
In an online briefing yesterday, Lawrence Fernandez, Meralco vice president and head of utility economics department, said the three have a two-month stockpile but that they are seeking for alternative sources such as Australia in case the ban is extended.
Fernandez said this could affect power rates.
Newcastle coal futures price, the global benchmark for the said fuel averages $195 per MT for the month which leaves logistics cost as the primary difference for pricing between Indonesian and Australian coal.
Nearly 70 percent of the 42.5 million tons of Philippine coal supply in 2020 was imported, according to government data.
Power generated by coal comprises about 60 percent of the country’s power mix.Earlier, Senate committee on energy chairman Sherwin Gatchalian, called on the DOE to prepare for contingency measures to ensure sufficient coal supply and avert possible higher coal prices following the Indonesian government’s decision to ban its coal exports this month.
“Part of the contingency measures should be to ensure the adherence of coal-fired power plants to the 30-day minimum inventory requirement… This could be a wake-up call as well. The government should probably start rethinking and be more committed in reducing the share of coal by further diversifying our generation mix,” Gatchalian said, in a statement.
Meanwhile, energy advocacy group Power for People Coalition (P4P), echoed the same sentiments that the country should push for a more diverse fuel sources.
“Consumers keep getting caught in a web of power stability woes and volatile prices all because we depend on a finite and largely imported energy source. As we wait for implications of Indonesia’s export ban to be reflected on our monthly bills just like last year’s energy crunch did, we can already be sure that more of such will happen in the future for as long as we insist on using fossil fuels even as our country’s vast indigenous renewable energy capacity waits to be harnessed,” Gerry Arances, convenor of P4P, said in a separate statement.
Based on data from the DOE, as of end-2020, the Philippines imported a total of 29.52 million MT of coal. Of that, 28.6 million MT or 96.88 percent came from Indonesia followed by Australia at 538,212 MT equivalent to 1.82 percent with the remaining coming from South Africa, South Korea, Russia and Vietnam.
For the similar period, the country’s demand for coal fuel reached 32.85 million MT, 28.35 million MT of which came from importation with only the remaining 4.5 million MT from local sources.
As of end-2020, total installed generation from coal-fired power plants hit 10,944 MW equivalent to 58,176 gigawatt hours of power generation or 57 percent of the mix.
