The Philippine Energy Plan, which aims to reduce coal imports by 20 percent and encourage local production, projects coal demand to grow from 12.2 million metric tons in 2008 to around 15.28 million MT in 2014, of which 13.06 million MT are for power generation and 2.22 million MT are for industries.
In 2007, about 75 percent of coal consumed in the Philippines came from other countries (7.
7 million MT out of 10.2 million MT). The countrys main source was Indonesia (4.5 million MT), followed by China (2.1 million MT).
In 2008, China almost completely stopped exporting coal to meet its own demands. This, coupled with rising fuel prices, pushed prices up at the wholesale electricity spot market, resulting in higher power rates for customers of Manila Electric Co. (Meralco).
Meralco customers had to pay an additional 67.17 centavos per kilowatt-hour in April 2008.
In the Philippines, coal comes from Semirara Island, Cagayan Valley and Surigao del Sur.
Coal accounts for about a third of the generation mix of National Power Corp., the countrys biggest power producer. Napocor has earmarked as much as P26 billion this year for the purchase of its coal requirements.
The bulk of the amount will be used for the coal requirements of the 1,218-megawatt (MW) Sual power plant in Pangasinan, 700-MW Pagbilao plant in Quezon and the 200-MW Naga facility in Cebu.
Other existing coal plants in the country are in Calaca, Batangas; Masinloc, Zambales; Mauban, Quezon; Mabalacat, Pampanga; Toledo in Cebu; and Misamis Oriental. In December 2006, there were 38 existing coal operating contracts.
In May, the Department of Energy offered contracts to explore and develop 30 prospective coal areas in the country under the fourth Philippine Energy Contracting Round (PECR) 2009.
PECR is a public bidding round aimed at encouraging companies to invest in the countrys energy sector.
The coal areas offered for bidding are located in 14 provinces.
Environmentalists slam the operation of coal-fired power plants because these emit large amounts of carbon dioxide, contributing significantly to climate change.
Coal-fired power plants also emit toxic substances like mercury and arsenic, which have adverse effects on humans, crops and even building materials.
Environmental activist group Greenpeace estimates that a 100-MW coal plant emits at least 25 pounds of mercury per year. All it takes to contaminate a 10-hectare lake, according to Greenpeace, is 0.002 pound of mercury.
Mercury can also cause severe brain damage in fetuses and mental disorders, motor and emotional disturbances and even death in adults. Meanwhile, arsenic is a known carcinogen or a substance that causes cancer.
Mining for coal also has several adverse effects on the environment and on human health. Surface mining, in which the horizontal contours of a mountainside are stripped, entails the elimination of vegetation and results in the destruction of soil profile.
Forests are wiped out by the mountaintop removal process of coal mining, leading to the destruction and displacement of wildlife and degradation of air quality.
Coal refuse in mine sites can seep into the ground and poison bodies of water. Coal soot causes lung diseases like cancer.
Environmentalists have suggested alternative sources of power like wind, sunlight and biomass.
Greenpeace, quoting a U.S. study, says that wind energy in the Philippines can supply more than seven times the countrys power demand.
Sunlight that falls on land half the size of Quezon City can provide for the whole countrys energy needs, Greenpeace added.