Coal demand per year seen to rise amid higher growth

THE country's demand for coal will increase by a million metric tons each year until 2020 as new coal-fired power plants start operating between now and the next four years, the head of an industry association said, pointing out that the projection was "conservative" and has yet to factor in expectations of higher economic growth in the near term.

"We can expect more if the new administration is expecting a 6-7% [economic growth]," said Arnulfo A. Robles, executive director of the Chamber of Coal Mines, in an interview on the sidelines of the 4th Annual Philippines Power and Electricity conference in Pasay City.

He said his projection was based on a gross domestic product (GDP) growth rate of 5-6%, and has yet to factor in the country's growing population and the retirement of old coal power plants.

The other day, the Department of Energy (DoE) said the new administration was targeting a GDP growth rate of 6-7% this year, 6.5-7.5% in 2017 and 7-8% until 2022. It also said higher growth for energy use "specifically for electricity is expected."

Based on latest DoE data, the country imported 17,407,089 metric tons (MT) of coal in 2015, the bulk of which or 16,555,968 MT came from Indonesia. The rest came from Vietnam, Russia and Australia.

"Demand is continuing," Mr. Robles said, adding that he projects "an increment of 1 million [MT] per year until 2020... because of the new power plants coming in."

He said he also expects imported coal to increase once the "supercritical" power plants under construction are completed. These plants are highly efficient and have lower emissions, but require higher grade imported coal.

Meralco Powergen Corp. (MGen), the power generation arm of the Manila Electric Co. (Meralco), is co-developing a 455-MW supercritical coal-fired power plant in Mauban, Quezon, under San Buenaventura Power Ltd. Co. It is also developing a two-unit supercritical coal power plant in Atimonan, Quezon, each with a capacity of 600 MW under Atimonan One Energy, Inc.

Last year, the country consumed 22,006,401 MT of coal, with power generation accounting for 79.77%, cement for 15.22%, and other industries cornering the rest.

Locally produced coal amounted to 8,173,078 MT last year, mostly coming from the Semirara coal mines.

Mr. Robles also cited the recent statement from DoE Secretary Alfonso G. Cusi that the country needs the baseload power produced by coal-fired plants that can consistently meet demand for 24 hours.

"It's clear enough. It's baseload. It's not renewable energy," he said.

Separately, the Federation of Philippine Industries (FPI) said coal remains the affordable power source for Filipinos, placing this cost at P4.2079 per kilowatt-hour, way lower than wind energy's P7.4 per kWh and less than half of solar's P8.69 per kWh.

"Increased penetration of renewables will only serve to increase the already high electricity rates in the Philippines," the federation said.

It issued the statement in support of President Rodrigo R. Duterte's stand not to honor the previous government's pledge during the Paris climate summit in December to reduce its greenhouse gases (GHG) by 70% by 2030.

Jesus L. Arranza, FPI chairman, said the Philippines was a minimal contributor to carbon emissions "both on a total and per capita basis" compared with the rest of the world. It also "has a relatively high penetration of renewable energy capacity," it added.

The federation said the Philippines accounts for 1.37% of the world's population, contributes only 0.24% of the global carbon dioxide (CO2) emissions or significantly lower than 1% of the other GHGs.

"On a CO2 emissions per capita per annum basis, this translates to 0.9 metric tons CO2 per capita much lower relative to more developed countries such as the United States (17), Germany (8.9), China (6.7), and even neighboring Thailand (4.5)," it said.

The federation also said the Philippines' electricity rates were among the highest in the world yet its GDP per capita lagged behind and ranked 118th.

"In addition, the Philippines already has a high installed power generation capacity from renewable sources at 32%, driven primarily by geothermal and hydro resources, which is even higher than far more developed economies such as Germany (24%) and United States (12.2%)," it said.

"Growth in industrialization and hence employment in the Philippines is dependent on low cost generation," FPI said.

Mr. Arranza said that compared to the thousands of coal-fired power plants in developed countries, the Philippines only has 23 such plants, "and these are the backbone of the country's generating sector."

Source: Business World Online