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Philippines moratorium on coal projects will attract USD 30 billion in renewable energy investment

November 05, 2020
Sara Jane Ahmed and Melissa Brown
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Key Findings

The Department of Energy (DOE) has called for a moratorium on greenfield coal power plants. The DOE decision marks a clear break with past policies and comes as the Philippines prioritizes the need for more flexible and lower cost alternatives to thermal power baseload.

The Department of Finance’s leadership continues to make clear the aim to shift investors to clean energy resources and green technologies. They have also indicated their determination to make economic development more inclusive and communities more resilient.

Executive Summary

The moratorium on greenfield coal power plants means that new planned coal projects will no longer receive permits from the Department of Energy. This is a welcome development because power sector stakeholders can now prioritize modern renewable energy and storage projects that can deliver lower costs and price stability while delivering domestic energy security.

Compared with its Asian peers, the Philippines has uncompetitively high electricity prices. That means the new generation of deflationary renewables provide an immediate opportunity to improve the power system's cost-competitiveness.

In contrast with more developed global power markets, Southeast Asia and South Asia have been the last bastions of coal growth. The DOE’s new policy stance makes it clear that Philippine policymakers and industry leaders are now ready to embrace more cost-effective clean energy options.

Sara Jane Ahmed

Sara Ahmed is founder of the Financial Futures Center and an advisor to the Vulnerable 20 Group of Finance Ministers (V20) of the Climate Vulnerable Forum (CVF). The Financial Futures Center supports developing countries catalyze an economic transformation to launch a decade of progress with five years of fast-tracked action aimed at ultimately achieving climate prosperity by 2030.

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Melissa Brown

Former Director, Energy Finance Studies, Asia, Melissa Brown, a former securities analyst at JP Morgan and Citigroup, has played a leading role in various Asian investment organizations focused on mainstream and sustainable investment strategies for public and private equity investors over the past 25 years.

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