HomeNewsCoal plants identified as ‘key contributors’ to power rate spikes 

Coal plants identified as ‘key contributors’ to power rate spikes 

Coal plants have been identified as the primary culprits behind the recent power rate spikes and continuous outages, according to a report by the Center for Energy, Ecology, and Development (CEED).

The report, titled “Can’t Take the Heat?” released on Monday, revealed the impact of coal and gas plants on the power grid’s stability.

The Power for People Coalition (P4P) criticized coal plants for causing nearly continuous red and yellow alerts during one of the hottest summers on record. 

Data from the CEED report indicated that plants owned by San Miguel Corporation (SMC), Aboitiz Power, First Gen, and DMCI Holdings are major contributors to the electricity shortage. 

Over the past five years, 71.1 percent of forced outage incidents were attributed to coal (51.23 percent) and gas (19.87 percent) plants, according to CEED. 

“Five out of every ten incidents of forced outages come from coal plants, which are central to our country’s grid as designed by the Department of Energy (DOE). The DOE is supposed to ensure reliable and affordable energy for all Filipinos, but instead, it continues to rely on these fossil fuels despite their proven unreliability and high costs,” said Gerry Arances, P4P Convenor.

Leody de Guzman, President of Partido Lakas ng Masa (PLM), expressed frustration over the recurring outages.

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“It has become an annual tradition for fossil fuel companies, especially those using coal, to experience outages during summer. Expensive electricity coupled with poor service is a double burden for workers,” he said. 

The CEED report also highlighted that three companies—SMC, Aboitiz Power, and First Gen—supplied power to the spot market while their other plants were either on forced outage or underperforming during the April 2024 alerts. 

The report said this situation underscores the unreliability and high cost of coal and gas plants, as outages lead to increased reliance on the spot market where prices are higher. 

“The Philippine energy sector is broken. Our reliance on the least reliable and most expensive energy sources must change. We need stricter standards and higher penalties for non-performing plants, as well as an investigation into potential collusion among major players to extort more profits from consumers.” said Arances. 

The report, covering the period from 2019 to 2024, showed that fossil fuel plants break down three times more frequently than other types of power plants. 

CEED noted that this unreliability not only affects the grid’s stability but also leads to higher electricity prices for consumers.

Arances called for immediate and long-term actions, including a cap on spot market prices and the implementation of stricter performance benchmarks for power plants. 

He stressed the importance of protecting consumers from fluctuating energy prices and ensuring a reliable energy supply.

“We need major reforms in the sector. Until those reforms take place, it is crucial that the government protects ordinary consumers from the wild fluctuations in energy prices. The cap on spot market prices is a good start,” he said. 

“We should also apply stricter standards in performance and higher penalties for these broken plants. Finally, we should investigate if some form of collusion is happening among these big players to extort more profits from consumers,” Arances added. 

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