Indonesia assures PH of coal supply despite dependence concerns

The Philippines was assured of a "steady" supply of coal by its top source, Indonesia, as the government seeks to cushion the country from higher electricity prices due to the global oil price shock amid the Middle East crisis, Energy Secretary Sharon Garin said Tuesday.

“We met with the Indonesian ambassador, and we got Indonesia to assure us of our steady supply of coal,” Garin told reporters at a virtual briefing.

The Energy chief said the DOE is in talks with coal-fired power plant generation companies “to check how much they can increase their generation.”

“[We’re] also trying to solicit their support on this temporary measure… Maybe it's not necessary because they have stock. We also have our own coal with certain limitations on who can use it. So maybe it will be necessary, maybe it won't, but we have to see how this will plan out,” she said, referring to the plan to increase the importation of coal from Indonesia.

Coal accounts for the lion’s share of the country’s energy mix at about 60%.

“What I can say is if we are successful in implementing this, the increase in electricity rates because of the conflict in the Middle East will be lower. We are targeting to reduce that increase by P2,” Garin said.

The Energy Regulatory Commission earlier said that electricity rates are expected to rise in April due to the Middle East crisis.

The National Association of Electricity Consumers for Reforms (NASECORE) said if the projected increases are based on the additional cost, the electricity rate may increase by P2 to P4, but that would only cover the supply given by the Wholesale Electricity Spot Market (WESM).

It added that an additional P2 is equivalent to a P400 additional payment for households consuming 200 kilowatt hours.

“We’re good partners with Indonesia, but at the same time our companies… We’ve been discussing with them assessing their power plants on how much local coal they can maximize. That’s part of the contingency plans we are drafting now on how to make ourselves more sufficient in case of any trouble with any of our country suppliers," Garin said.

'Inflexible'

The Philippines currently has about 27,927 megawatts (MW) of total dependable capacity against a peak demand of roughly 19,000 MW. However, much of this capacity is tied to "inflexible" coal-fired baseload plants that cannot easily adjust to fluctuations in electricity demand, according to the non-government Institute for Climate and Sustainable Cities (ICSC).

“The issue is not insufficient power capacity, but too much of the inflexible kind,” said engineer Jephraim Manansala, ICSC chief data scientist, at a media briefing in Quezon City on Tuesday. 

Building too many baseload plants has resulted in inefficient grid operations, according to ICSC's report.

“An overcapacity of baseload power plants forces inefficient grid operations,” Manansala said.

Because electricity demand fluctuates throughout the day, coal plants are increasingly forced to ramp up and down—despite being designed for steady and continuous output.

“This results in baseload coal plants frequently cycling," he added.

Manansala explained that this frequent cycling places significant strain on coal plant equipment.

“Coal plants adjust their output throughout the day, placing significant strain on their equipment, leading to accelerated wear and tear,” he said.

Over time, this leads to structural damage inside plants.

“Thermal fluctuations create cyclic stress, weakening welds and leading to cracks, tube leaks, and overall degradation,” he added.

Boiler tubes, in particular, were highly vulnerable to repeated temperature and pressure swings.

Data presented in the ICSC study showed that many forced outages in coal plants are linked to these stress-related failures, including tube leaks and other equipment breakdowns.

“Consequently, this has inadvertently increased the risk of unplanned outages, as evidenced in the rising frequency of such incidents,” Manansala said.

The analysis also found that coal plants frequently exceed allowable outage limits set by regulators, with even newer facilities experiencing repeated breakdowns.

“Coal plants frequently have outages beyond their allowable limits and schedule… even a younger fleet of coal plants experiences frequent outages,” he added.

These outages have system-wide effects. According to the study, forced outages from coal plants are the primary driver of recurring grid alerts nationwide.

“Forced outages of coal plants are the main contributor to recurring grid alerts,” he said.

'Financial risks'

Beyond reliability concerns, the report also pointed to coal’s role in keeping electricity prices elevated and exposing the country to long-term financial risks.

The Philippines imports more than 70% of its coal supply, making it vulnerable to global price swings and foreign exchange risks.

“Coal poses financial risks that can lead to stranded assets in the long term,” Manansala said, citing frequent outages, volatile prices, and the global shift toward renewable energy.

He added that coal has not consistently met the country’s energy goals.

“Despite its dominance, coal has not consistently met the Philippines’ energy goals of affordability, reliability, and security,” he said.

Instead of building more coal plants, the group recommended expanding renewable energy sources such as solar, wind, hydro, and geothermal, alongside storage technologies and fast-ramping capacity.

“Flexible and distributed generation is the no-regrets strategy for the Philippines,” Manansala said.

Such a system, ICSC said, would improve reliability, reduce dependence on imported fuels, and shield consumers from volatile energy prices. —VBL, GMA Integrated News