Lifting the coal moratorium and allowing further development of fossil fuel power plants will only delay the country’s energy transition, exacerbate the Philippines’ climate vulnerabilities, and worsen the energy crisis, the Center for Energy, Ecology, and Development (CEED) said in a statement Tuesday. 

Amid continuing red and yellow alerts in the Luzon and Visayas grid, policymakers and private sector actors alike have floated calls on lifting the Department of Energy’s 2020 moratorium on greenfield coal plants. An article published by BDO Capital and Investments in PhilStar suggested building more thermal plants to supposedly address power shortages until renewable energy capacity is augmented. 

“We just went through record-breaking heat levels due to an El Niño exacerbated by the global warming. Propositions and moves by financiers and politicians to backtrack coal policies ignore the reality of the climate emergency,” said CEED Executive Director Gerry Arances. 

As shown by CEED’s 2024 Fossil Fuel Divestment Scorecard report, BDO is the second highest financier of coal among Philippine domestic banks, continuing financing of the industry despite the coal moratorium. Institutions engaged with coal face increasing financial risks amid growing global and domestic push to move on from coal, which could lead to stranding of coal assets.

Multiple studies, such as one by the International Institute of Sustainable Development, show that developing new fossil fuel projects—new oil and gas fields, as well as new coal and gas-fired power plants, would breach the 1.5C global warming limit. Contrary to claims that renewable energy will not be able to meet electricity demand, hence the need for coal and gas plants, projections by Climate Analytics show the Philippines has enough renewable energy sources to replace fossil fuels and still meet the future power demand of the country. 

“Claims of coal and gas being “bridges” towards renewable energy are simply deceptive. In truth, once these coal and gas facilities have been built, their owners will operate them until the end of their economic lives, and thus hinder our shift to renewable energy. We will only cement our fossil-fuel dependence, and suffer even worse heat and weather events,” said Arances. 

“We are already experiencing outages, red and yellow alerts, while the country has been depending on coal for a long time. It is clear that the problem here is the unreliability of coal plants that are undergoing forced outages or operating under capacity,” he added. 

The red and yellow alerts, and their resulting brownouts, are caused most often by fossil fuel power plants that undergo forced outages. In the past five years, half of the incidents of forced outages were attributed to coal power plants. According to an outage study by CEED, even relatively new coal plants become unreliable due to frequent outages. For one, San Miguel Corporation’s four-year old Masinloc coal plant underwent 25 forced outages from 2019 to 2023. Another study found that coal plants go on outages for as long as 74 days per year, compared to solar and wind energy with outages of only 13 days in a year. Moreover, renewable energy has been competitive with coal in terms of pricing. Data from Meralco last year show that generation charges from coal cost P9 to 28 per kilowatt-hour (kWh), much higher versus renewable energy’s P3 to 5/kWh. 

“In terms of security, affordability, and sustainability, renewable energy is the way to go. Any competent investment arm should be able to accurately assess the increasing physical and transition risk new coal projects stand to face, especially with both banks and government policies around the world moving away from the technology. There is no need for the country to move backward as other countries, and even our neighbors in Southeast Asia are already embracing renewable energy,” Arances added.