New coal-fired power plants in the Philippines would remain challenging to build even if the government lifts the existing moratorium, according to the Ayala Group’s ACEN Corp.
ACEN president and CEO Eric Francia pointed to growing hurdles in coal development, including weak social acceptance and financing issues, amid the country’s energy transition push.
‘Even if that (lifting of the ban) pushes through, we can’t depend on coal saving the day in terms of energy security and so forth,’ Francia said in an interview.
This comes amid discussions within the government on whether to scrap the ban in response to the raging Middle East conflict, which has put pressure on the country’s energy supply.
The Department of Energy is ‘considering’ the move against the backdrop of elevated fuel prices that could drive up electricity prices next month.
With the country facing a global oil crisis, Energy Secretary Sharon Garin has said coal ‘remains one of the cheapest options’ for power generation.
The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, backed the proposed policy shift, noting that the domestic economy cannot run on uncertainty.
‘While the transition to renewable energy remains our long-term goal, our immediate priority must be the stability and affordability of our power grid,’ PCCI president Ferdinand Ferrer said.
Since 2020, a moratorium has been in effect that bans the development of new coal plants as the government seeks to reduce the country’s reliance on fossil fuels. The ban does not cover existing and operational coal plants or those that are already committed.
Major local banks, including BDO Unibank Inc., Bank of the Philippine Islands, Security Bank Corp. and the Development Bank of the Philippines, have strengthened their commitment to ending financing for greenfield coal projects.
Notably, Philippine banks recorded no new coal financing throughout 2024, the first time since the Paris Agreement was adopted in 2015, according to the Center for Energy, Ecology and Development.
For ACEN, which operates one of the country’s largest portfolios of renewable energy assets, doubling down on clean power is the right path forward.
‘We’re not making a judgment that other technologies should not be considered. It should be considered. It should be a typical diversified portfolio to ensure energy security,’ Francia said.
Currently, coal still accounts for the largest share of the country’s power mix at over 60 percent, while renewables make up only 25 percent.