Energy Secretary Sharon Garin is eyeing the allocation of all or most of the coal produced from Semirara Island to local power plants, as new export rules of top supplier Indonesia pose risks to the domestic electricity situation.
Garin said the changes in Indonesian export guidelines would have an impact on the Philippines’ planned coal contract auction.
Consunji-led Semirara Mining and Power Corp. (SMPC), accounting for more than 90 percent of domestic coal production, has a 50-year contract with the government covering mining blocks on Semirara. This will expire in July 2027.
As the government turned down its proposal for a 13-year extension, the DOE is opening the industry to more players through a competitive auction.
The auction, however, has been facing delays. Now, the government is targeting to open the process by August or September.
But for Garin, the delay ended up being beneficial somehow, as the DOE could still make changes in the terms of reference.
This includes making sure the Philippines would get the bulk of the domestic coal output.
‘Semirara actually exports more than [half] of their coal (output) … Maybe we need to fix the terms of reference in the bidding so that they will comply, or be obliged, to prioritize the local market first,’ Garin told reporters last week.
‘As much as possible, I would recommend all of it (domestic output). But if not possible, then on the high side, 80 percent to 90 percent should be used in our power plants,’ Garin said.
The energy official, however, acknowledged that SMPC may have been prompted to sell the bulk of its output abroad because some power plants cannot use Semirara coal.
Garin said she saw some blending facilities in Indonesia, an approach that could be tapped by the local industry.