This Country Becomes a Victim of the Iran War: Energy Emergency - Seeks Help from Indonesia
The Philippine government has announced emergency measures to increase production from coal-fired power plants in order to curb the surge in electricity costs. This decision comes in the wake of armed conflict in the Middle East that has disrupted global gas shipments and sent world energy prices soaring.
Philippine Energy Minister Sharon Garin stated that with the skyrocketing costs of liquefied natural gas (LNG), the country will be forced to rely more heavily on carbon-emitting fossil fuels for the time being. The Philippines, an archipelago nation with 116 million inhabitants, has the highest energy costs in the region, where 60% of its electricity needs depend on coal.
Garin explained that in addition to efforts to maximise the use of local coal, the Philippines is also opening options to increase purchases of coal from its main supplier, Indonesia. This step is seen as the most realistic solution amid the threat of a gas supply crisis haunting the national electricity sector.
“We are talking with power generation companies and coal-fired power plant operators to check how much they can increase their electricity production,” said Garin, adding that this is a temporary measure that could begin as early as 1 April.
Garin added that the success of this scheme is crucial for the stability of household economies in the Philippines. If the increase in coal-fired power plant capacity goes according to plan, the government is confident that the pressure from electricity tariff hikes due to global geopolitical conflicts can be significantly mitigated.
“If we succeed in implementing this, at least we can reduce the electricity tariff increases resulting from the conflict in the Middle East,” said Garin.
On the other hand, Indonesia, as the main trading partner, has provided assurances to the Philippines regarding the supply of raw materials. The Indonesian government has ensured that there will be no restrictions on order volumes for the Philippines amid this emergency situation.
“There are no restrictions on our coal imports from Indonesia to date,” said Garin, adding that additional purchase increases may not be necessary if domestic production can cover the existing gap.
The Philippines has long been known as a country frequently plagued by power outages and heavily reliant on imported fuels to run its power plants. Philippine President Ferdinand Marcos actually announced a significant natural gas discovery near the depleting offshore Malampaya gas field in January.
That discovery was initially expected to extend the life of the Malampaya field, which supplies around 40% of electricity needs on the main island of Luzon. However, because that field is predicted to run dry in the coming years, the Philippines now has no choice but to strengthen the coal sector to maintain national energy resilience.