Major emission cuts seen with early coal plant retirements in Philippines

MANILA, Philippines — Retiring coal-fired plants early could prevent around 290 metric tons of carbon dioxide emissions, almost double the country’s emissions, an analysis of a climate data organization suggested. 

TransitionZero said that early retirement of coal plants by five years would avoid releasing nearly double the Philippines’ carbon dioxide emissions of 155.38 metric tons in 2022. 

The International Energy Agency suggests that developing countries like the Philippines need to phase out coal by 2040 to meet the global goal of limiting warming to 1.5 degrees Celsius. 

“The Philippines will need to make critical policy decisions for the early retirement of the coal fleet to be not only feasible, but imperative for businesses,” said Isabella Suarez, Southeast Asia lead at TransitionZero. 

TransitionZero identified Cebu Energy Development Corp. coal plant, Quezon Power Plant, and SEM-Calaca Power Corporation coal plant as potential candidates for early retirement. 

The group noted that without early coal retirement mechanisms, the Philippines will see the existing coal fleet retire between 2047 and 2051. 

At present, the Philippines’ power mix is nearly 60% coal, while renewables account for only 22%. However, the government aims to increase the share of clean energy in the generation mix to 35% by 2030 and to 50% by 2040. 

However, buyouts for early retirement could cost between $19,198 (P1.07 million) per megawatt (MW) to $2.8 million (P156.3 million)/MW. TransitionZero said this signals the need for clear policy directions by incentivizing early movers. 

“Retirement deals and refinancing mechanisms need to be bespoke and tailored to the local context. A robust selection criterion backed by data is necessary to inform transition schedules and facilitate access to appropriate transition finance,” said Matt Gray, CEO and co-founder of TransitionZero.

“This could include prioritizing plants with expiring power supply agreements, those with the highest emissions intensity, or with the lowest availability factors,” he added. 

The organization also stressed that channeling resources into clean energy projects and grid enhancements can make early retirement