THE Department of Energy (DoE) has clarified the implementation of its coal moratorium policy, saying that new capacity from on-grid coal-fired power plants may be allowed only under “exceptional circumstances.”
In an Oct. 14 advisory signed by Energy Secretary Sharon S. Garin, the agency laid out additional conditions and exemptions governing the processing of applications for endorsements for new coal-fired power projects.
The advisory was issued pursuant to guidance from the Office of the President and addresses inquiries about the moratorium’s applicability to self-generating or own-use facilities, as well as to new capacities in both on-grid and off-grid areas.
The DoE said the 2020 moratorium halted the processing of applications for new or “greenfield” coal projects, except for those “falling under the conditions for non-coverage,” noting that increased requests for clarification prompted the formal advisory.
EXCEPTIONAL CASES, EXEMPTIONSUnder the updated policy, the DoE said new capacity from on-grid coal plants may be allowed “solely under exceptional circumstances, such as during a declared or imminent power crisis, or when there is an imminent shortage of electricity supply that, if unaddressed, may lead to severe impacts in specific areas or regions.”
The agency also identified other categories of coal projects that may qualify for non-coverage under the moratorium. These include industrial parks planning to develop and use coal-fired power plants for their own operations, “provided that locators registered as Philippine Economic Zone Authority (PEZA) industrial park locators secure endorsement from the PEZA,” according to the advisory.
Coal-fired power projects in off-grid areas are also explicitly exempt, as are own-use coal plants supplying power for mining and processing of critical minerals essential to energy transition projects.
Developers of projects that fall under these instances are required to apply with the DoE for a “letter of acknowledgment of non-coverage,” the advisory said.
Proponents of coal-fired projects with existing letters of acknowledgment of non-coverage must commit to a guaranteed delivery or commercial operations date (COD), with any changes subject to DoE review and approval.
“All coal-fired power plants with a letter of acknowledgment of non-coverage shall have a time-bound transition plan to renewable or clean energy sources, with retirement or conversion to clean fuel alternatives not later than Dec. 31, 2060, whichever comes earlier,” the advisory read.
“This does not preclude such power plants from being retrofitted or converted for continued operation using clean fuel alternatives to coal.”
The DoE said the updated advisory supports the Philippines’ energy transition goals while maintaining energy security.
It will also study and determine a specific timeline for the retirement or transition of all existing coal-fired power plants, taking into account “the economic life span of the power plants, access to financing mechanisms, and the need to ensure sufficient and stable energy sources to replace coal.”
EFFECTIVITYThe advisory, addressed to all concerned stakeholders including the Energy Regulatory Commission (ERC) and PEZA, took effect immediately upon posting on the DoE website.
“The Department of Energy remains committed to balancing energy security, affordability, and sustainability in line with the country’s clean energy transition,” the agency said. — Sheldeen Joy Talavera