US energy trading and implications for Asia and Philippines

* This is my article in BusinessWorld last November 16, 2017.

bw ener

Among the global leaders who attended the ASEAN Summit 2017 this week in Manila were the leaders of the US, China, Russia, Australia, and India. These five countries are also the top five in having the world’s biggest coal reserves and top five biggest coal producers.

US President Trump in particular emphasized his desire for “reciprocal trade” with Asian countries. Energy trading is a growing sector in the US as it is now the world’s biggest oil and natural gas producer (overtaking Saudi Arabia and Russia in oil and gas output, respectively, since 2014) but not yet the world’s biggest exporter of these two commodities.

The subject of Trump’s energy policies was well-discussed by many scholars, researchers, and some players during the “America First Energy Conference” in JW Marriott Houston, Texas last Nov. 9, organized by the Heartland Institute and co-sponsored by many other US-based independent think tanks and research institutes.

I attended that meeting and it seems I was the only Asian in the big conference hall. I went there from a different perspective compared to American participants — to further understand how the evolving US climate and energy policies would impact Asia in the short to long-term, the Philippines in particular.

In his breakfast plenary lecture, Joe Leimkuhler, VP for drilling of LLOG, a deepwater exploration company, discussed whether the US can dominate energy as articulated by President Trump.

“Energy dominance” is defined as being able to meet all US domestic demand and export to markets around the world at a level where they can “influence the market.”

He showed lots of very interesting tables and charts including the usual Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis of current US energy environment. Among his conclusions are the following:

  1. Oil, natural gas — The US can have energy dominance in the short-term but to make it long-term, the shale revolution should be sustained and supported, and if more gas reserves are discovered.
  1. Coal — Supplies can meet domestic demand but may be unable to provide for short-term exports. There are no coal exporting facilities on the West Coast to cater to the biggest coal customers in the world, Asia. The states of Washington, Oregon, and California have passed laws preventing the construction of such facilities or delaying the permits. US coal is cheaper to produce and its quality is higher than other suppliers can give.

Many sessions in the conference provided extra information about the current weaknesses of the US coal industry despite its huge reserves.

In the session on “Peace Dividend: Benefits of Ending the War on Fossil Fuels,” Dr. Paul Driessen, Senior Fellow at the Committee For A Constructive Tomorrow (CFACT), showed these data on electricity prices, 2017, in US cents/kWh: (a) Germany: residential 35, business and industry 18; (b) California: residential 19, business/commercial 18, industry 14.5; (c) Indiana-Kentucky-Virginia average: residential 11.7, commercial 9.5, industry 6.5. Germany, Denmark, South Australia and California have the highest concentration of wind-solar farms and they have the most expensive electricity prices in the planet.

The US has the largest coal reserves in the world estimated at 381-year supply, shown in the Reserves/Production (R/P) ratio. Russia has the highest R/P ratio because its production and consumption is smaller compared to the US. China has the second biggest reserves but its R/P ratio is small because of its huge production and consumption in million tons oil equivalent (MTOE). In 2016, half of global coal consumption was made in China alone (see table).

Coaltable_111617

Once the US can build those coal export facilities in the West Coast and various anti-coal policies in the Clean Power Plan (CPP) and CO2 Endangerment Findings are finally reversed, Asia will have more options of cheaper and higher-quality coal, aside from what they currently get from Australia, Russia, Indonesia, South Africa, and others.

The Philippines is a small player in the global coal market — very small reserves, negligible production (mostly from Semirara), and meager consumption. Yet many environmentalists seek to further restrict, if not actually prohibit Philippine coal power plants and force us to depend on undependable, unstable, unreliable, erratic, intermittent, and expensive wind-solar energy.

Governments should not pick winners and losers via legislation and multiple regulations, taxation, and selected subsidies. They should allow consumers to realize higher consumer surplus via competition and more choices in energy sources that are cheaper, stable, predictable, and dispatchable.

Advertisements

The German Jamaica coalition before the collapse over energy and other issues

Until middle of this month, there was still hope of a possible “Jamaica coalition” in Germany – Black flag by CDU-CSU, Yellow by FDP and Green by the Greens. I posted these thoughts and news liniks from November 18-20, 2017 in my fb wall, reposting them here.
—————

Before, Merkel and CDU/CSU were chummy-chummy with Obama in the anti-coal, “save the planet” drama. Then pro-coal, climate realist parties AfD and FDP surged high in the Bundestag elections last Sept, CDU and SDP suffered big time. Now Merkel perhaps realizes that Trump is correct in allowing more coal power for highly-industrialized economies like Germany so Merkel won’t give in to the Greens’ blackmail of closing all coal plants just to have a coalition govt with them. The danger — a collapse in negotiation would mean new elections.

“The Greens reject a yearly 200,000 cap on asylum seekers, which is one of the CSU’s main demands….

Merkel has proposed to reduce the capacity of coal stations, by 7 gigawatts (GW) by 2020, instead of 5 GW as proposed earlier by the CDU/CSU and FDP, but the Greens insist on a 10 GW reduction.

The FDP and the Greens are also at opposing ends over the so-called solidarity tax, a 5.5 percent tax on incomes, capitals and companies. The end of the tax is a core FDP demand, which the Greens reject.”

— from the EU observer article, Nov. 17, 2017.

Meanwhile, this is fake news from The Guardian “German Greens drop car and coal policies in coalition talks with Merkel”, Nov. 8, 2017.

“It is clear to me that we will not be able to enforce a ban on internal combustion engines by 2030,” the Greens’ co-leader Cem Özdemir told Stuttgarter Zeitung.

The Greens are also prepared to modify their demand that the 20 most polluting coal-fired power plants in Germany should be shut by 2020.”

https://www.theguardian.com/world/2017/nov/07/greens-scale-back-policy-demands-german-coalition-talks

The Greens are outright watermelons, green outside, red inside.

Many watermelons and frequent climate junketeers and jetsetters are angry that Trump is not giving them more money for the expensive, thousands participants annual UN FCCC meeting, this year held in Bonn, Germany. Now the watermelons are extra angry that Merkel won’t give in to their demands that Germany should close down many of its coal power plants.

“Germany’s Merkel dodges coal deadline at climate talks”, Nov. 15, 2017.

“Germany generates about 40 percent of its electricity from coal, including the light brown variety called lignite that’s considered to be among the most heavily polluting fossil fuels.

“Coal, especially lignite, must contribute a significant part to achieving these goals,” Merkel said. “But what exactly that will be is something we will discuss very precisely in the coming days.”

http://www.kansascity.com/…/article184694013.html

The watermelons are a big bunch of hypocrites. They lambast coal yet super-enjoy Germany’s industrialization and its 24/7 electricity, 40% of which is from coal power. They also lambast other fossil fuel like oil yet they jetset by the thousands from many countries and cities, their airplanes and cars using oil, not water or solar.

Macron is less hypocrite when he lambasts coal because France is largely dependent on nuke power that produces about 75% of its total electricity supply. Next to Germany in having big coal power supply is Poland, which will host the UN FCCC 2018 meeting.

“Poland ready for SHOWDOWN with EU over climate change as Trump sends 74,000 tonnes of coal”, Nov. 16, 2017.

“Prime Minister Beata Szydło has warned MEPs she will “throw it back at them” if they criticise her nation’s carbon consumption at next month’s EU summit.

And that could set the scene for more stand-offs next year, when Poland hosts the next round of UN climate talks….

The ruling Law and Justice party are unapologetically pro-mining, a belief shared by US President Donald Trump, who visited the country in the summer and said: “Whenever you need energy, just give us a call.”

https://www.express.co.uk/…/poland-donald-trump-coal

“Mrs. Merkel’s failure comes despite astronomical costs. By one estimate, businesses and households paid an extra €125 billion in increased electricity bills between 2000 and 2015 to subsidize renewables, on top of billions more in other handouts. Germans join Danes in paying the highest household electricity rates in Europe, and German companies pay near the top among industrial users. This is a big reason Mrs. Merkel underperformed in September’s election.

Berlin has heavily subsidized renewable energy since 2000, primarily via feed-in tariffs requiring utilities to buy electricity from renewable generators at above-market rates. Mrs. Merkel put that effort into overdrive in 2010 when she introduced the Energiewende, or energy revolution.” (Nov. 17, 2017) https://www.wsj.com/articles/germanys-green-energy-revoltgermanys-green-energy-revolt-1510848988

“It has already announced some 6,000 job cuts in its wind power unit, due to falling prices in major markets such as India and the US.” (Nov. 16, 2017) http://www.bbc.com/news/business-42008269

‘German Conventional Turbine Producer Siemens To Slash 6900 Workers Worldwide Due To “Energiewende”’ (Nov. 18, 2017) http://notrickszone.com/…/german-conventional…/

ger1

“At the 17-minute mark, Bernd Benser of GridLab-Berlin tells viewers that while grid operator Tennet had to intervene only 3 times in 2002 to avert grid instability, last year he says the number was “over 1000” times — or “three times daily”.

These intervention actions, known as redispatching, cost the consumer about a billion euros last year alone, says Benser. The SAT 1 voice-over warns that more power transmission lines are urgently needed if the Energiewende is to avoid “becoming a sinking ship“. (Nov. 11, 2017) http://notrickszone.com/…/german-media-report-power…/

“Chief financial officer Markus Krebber said such a unilateral move by Germany, which had just contributed to making a pan-European CO2 trading mechanisms much stricter, would harm the economy and undermine the security of supply.

“Focusing on climate protection goals alone is not enough and will lead to fatal misallocations,” (Nov. 14, 2017), https://www.reuters.com/…/quick-german-coal-exit-would

ger2

Germany’s CDU/CSU and FDP rejecting the Greens’ anti-coal agenda

I like the development in the new German government. #1 CDU getting closer with #4 FDP (Free Democratic Party) in climate and energy policies while potential partner #5 Greens go more idiotic and watermelon-ic (green outside, red inside) in demanding zero coal power. The Greens have more commonality with #2 SDP and #6 Linke (commies). CDU is correct — if they follow the Greens for the sake of coalition-majority, #3 AfD will greatly benefit and further expand as AfD is explicitly anti-renewables alarmism and cronyism. Germany having 3rd highest electricity prices in the world might move to 2nd or 1st if the Greens-SDP agenda will prevail.

CDU
https://www.thegwpf.com/climate-policy-threatens-to-crash-german-coalition-negotiations/

“If coal plants are closed down in Eastern Germany and thousands of workers are made redundant, very soon 30% of voters will support the Alternative für Deutschland (AfD),” Laschet warned. … Prime Minister Laschet announced that he would not make substantial concessions: “If push comes to shove we will have to crash the talks.” He said that environmental policy was a bigger hurdle for the negotiations than immigration policy: “The latter is easier to settle than the closure of power stations.”
(translated to English by The GWPF)
http://www.spiegel.de/politik/deutschland/jamaika-sondierungen-armin-laschet-droht-mit-scheitern-der-gespraeche-a-1174776.html
“Kellner reiterated the Greens’ position that Germany should quickly close coal-fired power stations to help fight climate change, a position resisted by the other parties.” 
October 26, 2017.
https://www.reuters.com/article/us-germany-politics/german-coalition-talks-stumble-on-migration-climate-idUSKBN1CV1FZ

“While all parties agreed in principle this week that they want to uphold the Paris climate accord, the FDP is pressing for a commitment to curb government measures to promote renewable energy, which help make German power prices the second-highest in the European Union after Denmark’s.

“We certainly have to reduce carbon dioxide,” the FDP’s Suding said. “In Germany, this is much more expensive than in other countries and we have to find a way to reduce CO2 emissions more cheaply. Of course, there won’t be a complete phase-out of coal by 2030.”

October 27, 2017.
https://www.bloomberg.com/news/articles/2017-10-27/coal-standoff-hinders-merkel-s-push-for-next-german-government

“According to Lindner (FDP):

The project of the century Energiewende [transition to green energies] has failed. None of the agreed targets will be reached. Climate protection is stalled, energy prices are rising and they are burdening us as electricity consumers, just as they are the industry and middle class. And not least of all it is becoming increasingly difficult to guarantee a secure power supply during the winter months.” 
http://notrickszone.com/2017/09/29/germanys-green-energy-project-close-to-death-eeg-feed-in-act-has-failed-has-to-go/#sthash.ZAheNnnr.RsV59Dyz.dpbs

It is good that both CDU/CSU and FDP are jointly resisting the deindustrialization goal of the Greens. One reason why AfD rocketed high to nearly 13% of the votes despite being created only 4 years ago is on the energy mini-suicide of the watermelon groups.

Energy 101, Disinformation and fake stories by the watermelon movement

Fake stories and disinformation can be rampant in the energy sector because of the climate alarmism drama and renewables cronyism agenda. A recent example is one published in BWorld last Thursday, The Philippines’ Ill-Advised P1 Trillion New Coal Gamble, October 20, 2017 By Sara Jane Ahmed.

The lady seems to be ignorant of many data before writing their anti-coal drama. Some things she wrote:

  1. “High electricity prices are driven by imported fuel and subsidies; electricity surcharges…”

à Wrong. Check Meralco website for customer charges, http://www.meralco.com.ph/consumer-information/rates-archive. Here, October 2017 charges, if one consumes up to 300 kWh, he would pay a total of P2,880, one-half of which is for generation charges and the other half for 11 other charges including taxes and FIT subsidy for mostly wind-solar.

meralco bill

From the generation charge, about half of which are from Malampaya natgas-using plants in Batangas; there are hydr0, geothermal, coal could be about 40% of Meralco energy mix.

  1. “Diesel dependence, much like our growing national coal dependence, is a result of subsidies…”

à Wrong, diesel has no subsidy, or maybe she refers to the current zero excise tax for diesel but under Duterte TRAIN, it will soon be slapped with P6/liter excise tax.

  1. “Coal subsidies assure the private sector guaranteed returns…”

à Wrong. Currently coal excise tax is P10/ton but under TRAIN, to rise to P20/ton. Now Dr. Ciel Habito proposes a P600/ton excise and carbon tax for coal. I criticized his proposal here, http://bworldonline.com/carbon-tax-wrong/

  1. “Meralco is currently underwriting a solar power supply deal for 85 megawatts (MW) at P2.99 per kWh.”

à True, and that’s the exception, from Solar Philippines of Leandro Leviste, son of Sen. Loren Legarda. Many solar farms here are given the cronyist FIT or guaranteed price for 20 years of P8.69 to P10+/kWh.

  1. “Philippine’s financial sector as massively exposed now to the eventual stranding proposed new coal fleet to the tune of more than 10,000 MW in overcapacity and P1.05 trillion in financial risk”.

-> See this: “Countries that have coal consumption of at least 2.1x expansion over the past two decades are also those that experienced fast GDP growth of at least 3x expansion. Prominent examples are China, India, South Korea, Indonesia, Vietnam, Malaysia, Philippines, and even Pakistan.” http://bworldonline.com/high-carbon-tax-irrational/

Finally, the lady is highly disoriented, talking about diesel and coal subsidies when there is none. Yet silent on renewables subsidies, haha. P10B in 2015, P18.5B in 2016, P24.4B this 2017, and P26B next year. The main recipients of this renewables cronyism are the wind farms of the Lopezes/EDC, Ayalas’ Caparispisan and Bangui, Phinma, Alternergy/Vince Perez, etc. http://www.bworldonline.com/content.php?section=Opinion&title=why-the-fit-all-is-a-burden-to-consumers&id=145326
The “planet saviours”, the renewable cronyism lobbyists, they want more government intervention — in arm-twisting the consumers to pay higher electricity to subsidize renewables; in coercing the grid to prioritize the intermittent, unstable, unreliable, non-dispatchable energy sources; in choking and even killing stable, reliable, dispatchable 24/7 sources like coal, gas and nuke. Watermelons — green outside, red inside.

Cronyism in Renewable energy, gas sectors?

This is my article in BusinessWorld last September 7, 2017.

bw

Last week, the National Transmission Corp. (TransCo), the administrator of feed in tariff (FiT) — which guarantees high prices for 20 years for variable renewable energy (solar, wind, biomass, run of river hydro) filed a petition at the Energy Regulatory Commission (ERC). It sought for an increase in FiT-Allowance to be paid by all electricity consumers nationwide.

FiT-All is one of roughly 12 different charges and taxes in our monthly electricity bill and the one with the fastest increases in recent years: four centavos/kWh in 2015, 12.40 centavos in 2016, 18 centavos this 2017, and 29.32 centavos next year. It is a clear example of renewables’ cronyism that penalizes electricity consumers and rewards renewable energy (RE) developers supposedly to help “save the planet.”

Also last week, I attended the Energy Policy Development Program (EPDP) lecture at UP School of Economics, entitled: “Natural gas: Addressing the energy trilemma and powering our energy needs.” The lecture was delivered by Mr. Giles Puno, President and COO of FirstGen, a big Lopez-owned power company. Mr. Puno covered many topics but I will only focus on the lecture’s three aspects.

One, the lecture mentioned that the cost of wind-solar keeps decreasing so efforts to decarbonize the economy is improving, away from coal power which cannot remain cheap in the long-term.

During the open forum, I said that this is not exactly correct because while it is true that the technology cost of wind-solar is declining, the FiT rates given to wind-solar keeps rising actually. FiT rates for wind batch 1 (2015 entrants) were P8.53/kWh in 2015, this went up to P8.90 in 2016, and P9.19 in 2017. Wind batch 2 (2016 entrants) were P7.40/kWh in 2016 and P7.71 in 2017.

Solar batch 1 (2015 entrants) FiT rates were P9.68/kWh in 2015, P9.91 in 2016, and P10.26 in 2017. Solar batch 2 (2016 entrants) FiT rates were P8.69/kWh in 2016 and P8.89 in 2017.

FiT revenues collected by all RE firms given FiT privilege were P10.22B in 2015, a figure that rose to P18.54B in 2016, and P24.44B in 2017.

Two, to address the energy trilemma (energy security, energy equity/affordability, environmental stability), the lecture questioned the 3,500 MW worth of coal supply in the Meralco power supply agreements (PSA). These PSAs were anathema to environmental stability and energy equity since power rate hikes will be expected since coal prices are expected to rise over the long-term. That government should instead prioritize natural gas development.

I mentioned in the open forum that I saw the World Energy Council (WEC) World Energy Trilemma Index 2016 and out of the 125 countries covered, the Philippines was #1 in environmental sustainability, thanks to our big geothermal and hydro, plus recently added variable REs. But Philippines was #92 in energy equity because of our expensive electricity, 3rd highest in Asia next to Japan and Hong Kong.

So it is wrong to demonize coal (nearly 35% of installed capacity but 48% of actual electricity production in 2016) that contributed to declining prices in generation charge in recent years. For instance, the load-weighted average price (LWAP) at the Wholesale Electricity Spot Market (WESM) was declining from about P5.40/kWh in 2012 to only P2.80 in 2016.

Consider also the fact that Philippines’ coal use is small compared to what our neighbors in the region consume. Vietnam consumes twice the amount of what we use, Taiwan three times, Indonesia five times, South Korea and Japan six times — for 2016 alone (see graph).

Energybig_090717

Power companies like FirstGen should focus on ensuring that electricity consumers have cheap and stable electricity available 24/7 without any brownouts, even for a minute. Instead of demonizing and suggesting the stopping of more coal power to come on stream.

Third, Mr. Puno and FirsGen want “government support crucial for LNG development and (1) Holistic and defined energy mix to direct planning and investments, (2) Incentivize LNG through fiscal and non-fiscal policies, (3) Secure LNG Off-take, similar to how Malampaya was underpinned.”

The first two items I consider as cronyist or seeking a crony status from the government. Setting the energy mix should be done by the consumers, not government. The previous Petilla/Monsada plan of 30-30-30-10 energy mix for coal-natural gas-renewable energy-oil respectively is wrong and has no sensible basis. It is good that new DoE Secretary Cusi has dumped it in favor of 70-30-10 energy mix for baseload-mid merit-peaking plants, respectively.

Government taxes should apply to all technology — coal, natgas, hydro, geothermal, etc. — no special privileges of tax breaks and other non-fiscal sweeteners. To ask for tax and non-tax privileges for LNG is asking for crony privileges.

We need less government regulations in setting the energy mix, less government favoritism for expensive wind-solar resulting in more expensive electricity. Government should focus on having energy laws and taxes that apply to all technology and players without any entity enjoying special privileges.

Energy Trilemma Index 2016

* This is my article in BusinessWorld last August 11, 2017.

bw1

The Philippines has acquired a growth momentum that started a few years ago in the past administration and we are now looked upon as among the fastest growing economies in the world. Sustaining fast GDP growth will require stable and cheaper energy because almost all economic activities now require energy and electricity.

energy-081117The World Energy Council (WEC), a UN-accredited global energy body composed of 3,000+ organizations from 90+ countries (governments, private and state corporations, academe, NGOs, other energy stakeholders) produces the annual World Energy Trilemma Index.

The Trilemma index is based on a range of data sets that capture both energy performance and their context, indicating energy sustainability of countries. The index is composed of three factors: energy security, energy equity, and environmental sustainability, defined as follows:

Energy security — effective management of primary energy supply from domestic and external sources, reliability of energy infrastructure, and ability of energy providers to meet current and future demand.

Energy equity — accessibility and affordability of energy supply across the population.

Environmental stability — achievement of supply and demand-side energy efficiencies and development of energy supply from renewable and other low-carbon sources.

There are 125 countries covered and ranked. Top five countries overall in the 2016 report are Denmark, Switzerland, Sweden, Netherlands, and Germany. Here are the rankings of selected Asian countries. Some Asian economies not included in the study are Indonesia, Taiwan, and Vietnam (see table).

opinion-Table-768x251

Based on these numbers, here are the implications for the Philippines in energy policy:

  1. Environmental sustainability: We are already world’s number one in this category. We have high reliance on renewables like hydro and geothermal plus newly added renewables like run of river hydro, biomass, solar and wind. There is no need to “further decarbonize” as suggested by the CCC, DENR and other greenies, suggesting that we close or discontinue having more coal power plants.
  2. Energy equity: We are very low here, ranking 92nd because of our expensive electricity, 3rd highest in Asia next to Japan and Hong Kong. However, there has been a steady decrease in generation cost of electricity in the country. The Load Weighted Average Price (LWAP) at the Wholesale Electricity Spot Market (WESM) has decreased from an average P5.37/kWh in 2012 to P4.65 in 2014 and further down to P2.81 in 2016. This is the result of more big coal plants, more players, more competition. But there are other factors that can neutralize these as discussed further below.
  3. Energy security: We are midway, ranking 61 out of 125 countries in this category. We need to add more big conventional plants to take over many aging plants, and to put in place an LNG facility in Batangas to import gas in case no substantial gas reserves are discovered when Malampaya gas runs out sometime around 2024.

There are at least four dangers in Philippine energy policies resulting in prices either rising or flatlining.

One is feed-in-tariff (FiT) or guaranteed high prices for 20 years for variables renewables especially wind-solar. FiT has been rising steadily and slam-dunking all electricity consumers from Aparri to Tawi-tawi: four centavos/kWh in 2015, 12.40 centavos in 2016, 18 centavos middle of this year, and going up to 26 centavos (Transco petition at the Energy Regulatory Commission [ERC]) later this year.

Two is transmission charge. NGCP must add more ancillary services to stabilize power supply from intermittent wind-solar, and build more transmission facilities in far-flung areas where these wind-solar plants are constructed. Consequently, transmission fees will slowly and steadily rise.

Three is system losses. High losses in provinces — areas which are run by monopoly electric cooperatives (ECs) — are ultimately passed on to the consumers. Current ERC and legislative proposals plan to allow these ECs to retain their high system losses while pressuring private distribution utilities (DUs), which on average have low system losses, to further bring this down.

Four is the impending renewable portfolio standards (RPS). This will require all ECs, DUs, and retail electricity suppliers (RES) to get a mandatory, minimum percentage of their electricity sales to come from expensive wind-solar and other variable renewables. If these renewables are cheap and getting cheaper as claimed by their developers and lobbyists, there is no need for RPS. But because they are expensive, RPS is made mandatory and coercively imposed.

Nature has given the Philippines energy advantage. Volcanoes have given us plenty of geothermal resources and potentials. Our big mountains have given us more waterfalls and big river systems.

Government policies favor expensive electricity via FiT, RPS, priority dispatch of renewables at WESM, accommodating more renewables in the grid. These policies must be reversed soon. Only then will we have higher scores in energy equity and energy security and finally, economic security.

Coal power and economic development

* This is my article in BusinessWorld on July 12, 2017.

bw2

Cheaper and stable energy means cheaper production costs for the industrial, agricultural, and services sectors of the economy. Cheaper energy also results in increased convenience for consumers too as many activities now are impossible without stable electricity supply.

In the modern history of Asian economies’ rapid growth, the use of coal power is an important contributor for their economic expansion.

o1big_071217

These numbers show three important things:

(1) Countries that have high and fast coal consumption are also those that experienced faster economic expansion (at least three times expansion of GDP size). Most especially China, India, South Korea, Indonesia, Vietnam, Malaysia, and Philippines.

(2) Countries with declining coal use are also those with slow economic expansion (below three times expansion of GDP size). Most notable are the US, Russia, Germany, and UK.

(3) Philippines’ coal use is actually small compared to its neighbors; its 2016 use is just nearly 1/2 of Malaysia and Vietnam’s consumption, just 1/3 of Taiwan’s and almost 1/5 of Indonesia’s. South Korea, Japan, India, and China’s consumption are many times bigger than the Philippines’.

Recently, groups have suddenly scored seven coal power plants that entered into power supply agreements (PSA) with Meralco last year. These coal projects are (1) Atimonan One Energy (A1E) 1,200 MW, (2) Global Luzon (GLEDC) 600 MW, (3) Central Luzon Premiere (CLPPC) 528 MW, (4) Mariveles Power (MPGC) 528 MW, (5) St. Raphael Power (SRPGC) 400 MW, (6) Redondo Peninsula (RPE) 225 MW, and (7) Panay Energy (PEDC) 70 MW.

This covers a total of 3,550 MW of stable and affordable energy that can lead to cheaper and reliable electricity supply for more than 20 million people in Metro Manila, Bulacan, Rizal, Cavite, Laguna, and parts of Batangas and Quezon provinces.

These groups — Center for Energy, Ecology, and Development (CEED), Philippine Movement for Climate Justice (PMCJ), Sanlakas, Freedom from Debt Coalition (FDC), Koalisyong Pabahay ng Pilipinas (KPP), Power for People (P4P) member organizations, others — argue that coal plants are detrimental for the people’s health and livelihood as well as bad for the environment.

They are wrong.

What is bad for the people’s health and livelihood are more candles and noisy gensets running on diesel when there are frequent brownouts coming from intermittent, unreliable renewables like solar and wind. Candles are among the major causes of fires in houses and communities.

What is bad for people’s health and security are dark streets at night that contribute to more road accidents, more street robberies, abduction and rapes, murders and other crimes. Many LGUs reduce costs of street lighting when electricity prices are high (ever-rising feed-in-tariff or FiT for renewables, more expensive oil peaking plants are used during peak hours, etc.). Expensive and unstable electricity can kill people today, not 100 years from now.

Seeking to disenfranchise some 3,550 MW of stable and cheaper energy supply from seven coal plants is suspicious. There are no big hydro, geothermal, and biomass plants coming in. Wind and solar are limited by their intermittent nature, have low capacity factors, high capital expenditures, and often are located far away from the main grid. The only beneficiaries of disenfranchising big capacity coal plants then would be the owners of new natural gas plants.

Are natural gas cheaper than coal power? From the recent experience of Mindanao where many big coal plants were commissioned almost simultaneously, the answer seems to be No. The generation price in Mindanao has gone down to below P3/kWh, on certain days even below P2.50/kWh. Which means coal power has big leeway for lower price if competition becomes tighter. This cannot be said of natural gas plants here.

Consumer groups and NGOs should bat for cheaper, stable electricity. If they fight for something else like intermittent and expensive renewables, or more expensive gas plants, then they abdicate their role as representatives of consumer interests. Pathetic.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET, both are members of Economic Freedom Network (EFN) Asia.