The Department of Energy (DOE) is supporting the local energy sector’s push to retire coal-fired power plants and to shift to full renewable energy (RE).
In a statement, the DOE noted ACEN Corp.’s pioneering move to voluntary retire its 246 megawatts (MW) South Luzon thermal coal-fired power plant.
Earlier this week, ACEN partnered with the Rockefeller Foundation’s Coal to Clean Credit Initiative and the Monetary Authority of Singapore to explore major steps toward accelerating the phaseout of coal plants.
“In line with its Energy Transition Program, the Philippine government is encouraging a voluntary early and orderly decommissioning or repurposing of existing coal-fired power plants, while securing a stable supply and addressing the climate emergency by ramping up our renewable energy target of 50 percent share by 2040,” DOE said.
However, the DOE emphasized that since the local power sector setup is unique as it is market driven and privately-owned, the government’s role as regulator is limited to ensuring a competitive environment for the sector.
The agency also explained that since costs of transition as well as the need for greater investment infrastructure will be fully borne by the already overburdened electricity consumers, a strategic transition to RE is needed.
“This is consistent with our view that it must be voluntary and must make business sense in a power sector like the Philippines that is privately-owned, market driven and un-subsidized. ACEN has our full support for this initiative, and we will explore ways to facilitate this program through access to climate financing,” the DOE added.
The DOE also said it is in favor of incentivizing business owners and institutions that will participate in undertaking and working towards energy transition, but this should go beyond retirement of coal and must also involve better access to electricity in remote islands, improvement of distribution systems, more energy storage systems and making energy affordable for all, among others.
As of end-2022, installed capacity from coal-fired power plants is at 12,428 MW equivalent to 43.9 percent of the 28,258 MW overall installed capacity for the period.
