AsiaElec: Manila’s reliance on Indonesian coal worries National Senate
When Indonesia announced earlier in the month that it was putting a block on coal exports to help alleviate critically low stockpiles at home, few nations were as immediately affected as the Philippines.
Coal prices went up across much of the region, especially so in China and Australia, but it was in the neighbouring Philippines capital of Manila that the worst effects have been felt to date.
As a nation heavily reliant on coal for its energy supply with over 57% of its entire power generation linked to coal, Manila is more dependent than most on imports to fuel its 28 coal power stations around the sprawling 7,000-island Southeast Asian nation.
Last year, the Philippines relied on Indonesia for a total of 96.88% of its coal supply – with the remainder coming from Australia, Vietnam and smaller suppliers across Asia.
Speaking to the Philippine Department of Energy (DOE) in the wake of the announcement blocking exports by Jakarta, Senator Sherwin Gatchalian said: “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.”
The serving chairman of the Senate energy committee Gatchalian went on to say that the export ban is worrying for coal power plants across the country looking to secure supplies, adding that a lack of supply could lead to power cuts across large areas.
Philippine coal usage last year totalled almost 42.5mn tonnes, with 69.5% of the total imported. An estimated 2.3mn tonnes per month was imported from Indonesia alone in 2021.
Just 30.5% of the coal used in the Philippines is understood to be mined domestically.
A statement released later by Senator Gatchalian continued: “(P)art of the contingency measures should be to ensure the adherence of coal-fired power plants to the 30-day minimum inventory requirement” in a reference to what some analysts have in the past considered a limited following of stockpile regulations by some of the nation’s operators.
Addressing the obvious over-reliance on Indonesian coal suppliers, the up and coming politician then said: “(T)he government should also consider looking for other suppliers, especially in the coming weeks given the possible decline in stockpiles coming from Indonesia which could result in soaring coal prices.”
Recent appeals by Manila, along with similar calls from Tokyo and Seoul, have had some effect, with Indonesia in the past few days agreeing to at least limited exports.
Alfonso Cusi, Manila’s current Energy Secretary, had appealed to Indonesia’s Minister of Energy and Mineral Resources Arifin Tasrif, through his nation’s foreign ministry but also, crucially, through the Association of South-East Asian Nations (ASEAN) co-operation mechanism prior to a green light on exports resuming.
While the full terms of the decision to partly lift the export ban are still being analysed, some movement has now been seen with vessels being cleared to depart for Japan, China and South Korea, according to Japanese sources.
Carriers earmarked for these nations had been left at anchor off Kalimantan in Borneo for over a week.
Issues in the Philippines, though, are not as critical as politicians are making out; at least not according to the vice-president of Manila Electric Co. (Meralco).
Claiming that “at least in the coming couple of months, there will be no supply disruption,” Joe Zaldarriaga said this week that in the wake of the export ban, the Philippines could simply import more from Australia and elsewhere.
This is not a mindset shared by influential energy advocacy campaigners Power4People Coalition (P4P), who have repeatedly pressed the central government in Manila to turn away from coal to help avoid fluctuation in electricity costs; P4P member Gerry Arances said: “As we wait for the implications of Indonesia’s export ban to be reflected (on our monthly bills) … our country’s vast indigenous renewable energy capacity waits to be harnessed”, adding: “(W)e must begin by putting a stop to any new coal plant still in our pipeline.”