NGO reacts to Duterte statement that coal to be used for 30 more years, solar still not feasible

MANILA, 14 July 2020 – In a recorded speech aired this morning, President Rodrigo Duterte told military troops in Jolo yesterday he was “ready to open the borders” for trade, including for “big time coal.” He added that “coal will be used for the next 30 years” and solar technology is still unsustainable.

Reacting to this statement, Renato Redentor Constantino, executive director of the Manila-based climate and energy policy group Institute for Climate and Sustainable Cities, said:

“Importing and burning more coal would not help the Philippines build back better. Coal is a losing proposition. In the country, new coal is a threat to grid stability and public interest if we do not take steps to protect the economy from the terminal decline of coal as a power source. If companies are foolish enough to pursue this course, the company itself, rather than working families and small businesses, should wholly bear the risks.

“Electricity prices in the Philippines are amongst the highest in Southeast Asia and is considered relatively high compared to global standards.

“If government is intent to bring in new coal, then all new coal power supply agreements must be rid of pass-through clauses that allow fluctuations in fuel cost and foreign exchange to be unfairly handed down to ratepayers. As things stand today, any additional costs and risks are simply passed along to the consumer without regulatory intervention, and imported coal prices will likely continue to rise, as they have largely done for the past two years.

“The same applies to foreign exchange risk. Since coal is imported and bought largely in US dollars, in the likelihood that the peso devalues again, it is not San Miguel or Aboitiz or Ayala or Meralco that will pay. Rather, the conglomerates’ mistakes will be tacked onto the electricity bills of families and small businesses who can ill afford price hikes. Government should ensure that conglomerates offer a fixed price for its power with no allowance made for passing on additional costs to the public.

“Global capital has been fleeing the thermal coal sector even before the pandemic. Ayala recently announced it will fully exit coal by 2030, and Bloomberg forecasts no more coal power will likely be built in the country past 2023, if at all. The Bangko Sentral ng Pilipinas also released its new Sustainable Finance Framework last April, which sets the stage not only for pricing climate and transition risk, but also for valuing climate-resilient and low-carbon opportunities.

“Speeding up the shift to renewable and decentralized energy would improve energy access, lower power bills, and avoid pollution in the long run, all of which would help families cope with the impacts of the lockdown and usher in a better normal. It would also attract investments and create new jobs, and reduce our reliance on expensive, polluting and imported coal and diesel.”