The coal plant revival and what may lie ahead for Palawan


The Department of Environment and Natural Resources (DENR) disclosed this week it had finally given an Environmental Compliance Certificate (ECC) to the planned 15-megawatt coal plant facility in Palawan.

Those who have been closely following this issue would be aware of the controversy surrounding this project, and the passionate debate on whether or not Palawan should embrace coal technology as opposed to renewables or traditional power sources.

The Consunji-led DMCI Power Corp. bagged this power supply deal with the Palawan Electric Cooperative (PALECO) as early as 2012 but never got off the ground to constructing the facility because of local opposition and the DENR’s hedging on its ECC. Gina Lopez, a staunch environmental activist initially tapped by President Duterte to head the DENR, had rejected the project at the outset of her abbreviated term, forcing DMCI to deploy traditional power generators in trying to cope with its contractual obligations.

PALECO itself had been criticized for being too accommodating to DMCI in the face of the company’s failure to abide by its contract. To its advantage, DMCI has enjoyed the support of the local political leadership and had long secured the important Strategic Environmental Plan (SEP) clearance from the Palawan Council for Sustainable Development (PCSD).

Barring any legal challenge from its opposition, the company should be able to start constructing its facility in Narra town. It will need however to resolve key operational issues including a conditionality imposed on its SEP clearance and ECC that it will only be allowed to use high-grade coal and dump its own low-grade Semirara coal with high mercury content from its Antique mines. Either the company convinces the PCSD and the DENR to remove this restriction, which may be possible given its seeming political clout, or it may have to renegotiate its P9.38/MW selling price to PALECO which was based on cheap coal that it doesn’t need to import into the country, and the putting up of another coal-fired power plant to complete its configuration to deliver a total of 25 MW.

The national government’s go-ahead for a coal plant facility in Palawan belies a discombobulated policy framework and direction for the island province. In 2014, while the DMCI project was practically in limbo, the Department of Energy initiated a multi-stakeholder study and successfully brokered a robust energy development plan for the province that took out coal as a baseload power source for Palawan.

The Palawan Island Power Development Plan (PIPDP) had established, among others, that the sustainability and cost of tapping into renewables mixed with traditional power sources far outweigh that of coal, a technology that the modern world is already trying to get rid of. It was a happy conclusion for the island of Palawan given its global importance as an environmental hotspot. The DENR, the provincial government of Palawan, PALECO and all other power stakeholders in the province had all signed in to this plan.

It was a short-lived conclusion as well. Following the PIPDP formulation and adoption, someone or the DoE apparently inserted the Palawan coal plant project among the Energy Projects of National Significance (EPNS) list that President Duterte had endorsed for seamless approval.

All that effort that the DoE initiated and followed through for nearly two years to develop a no-nonsense energy masterplan for Palawan had just got flushed down the drain. Those who keenly follow these developments will note that right before this year’s elections, the DoE also sought the cancellation of the PALECO franchise without even consulting its partner stakeholders. If it was a brazen move, it pales in comparison to the gall and bravery of two outgoing Palawan congressmen to sponsor a bill in Congress granting the Razon group’s MORE Reedbank Power Corporation a franchise that will instantly kill PALECO.

These recent turn of events merely shows that the Palawan power situation is in a very vulnerable condition to power influencers, due in large part to the national and local leadership’s failure to set proper directions and policy. The blame, if things turn to worse than it is now given the regular blackouts and the inefficiency of PALECO and its power suppliers including DMCI, will fall on their laps – and, shame on them, only on hindsight.

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