CAGAYAN DE ORO CITY (MindaNews /03 August) —  The LNG industry was quick to pick up a Reuters news dispatch last July 22, 2025 on the supposed decline of coal in the Philippines and increase in use of Liquefied Natural Gas (LNG) for power generation.

The Reuters story, “Philippines set for first coal power decline in 17 years amid rising LNG use” may have surreptitiously promoted LNG as the go-to fuel as the country transitions from imported, expensive and dirty coal. The story may have been meant for investors to come and invest in the LNG industry, as major power players in the country position for the establishment of more LNG power plants.

We suspect a narrative-building here, similar to the false narrative of the power oligarchs in the last 15 years that coal was the way-to-go for Mindanao as hydropower was no longer reliable, as the power plants in Mindanao were aging, solar and other renewable energy sources were expensive and intermittent; and the usual suspect, climate change.

The real culprit of the power crises in Mindanao was not the aging Agus-Pulangi Hydroelectric Power (APHC), but the privatization of two baseload power barges located in Nasipit, Agusan del Norte and Maco, Davao Oriental with combined rated capacity of 200MW in 2009. These power barges were fired up when precipitation was low, thus the recharge of the water level of Lake Lanao was slow. The power barges were also fired up to store more water in the lake which powers the Agus hydro plants – six cascading hydropower plants along the Agus River in Lanao Sur, Lanao Norte and Iligan City, in preparation for the dry months.

Immediately, when the two power barges were taken off from Mindanao’s baseload power equation, the water levels at Lake Lanao collapsed below the rule curve, as the Agus plants were forced to generate as much power to compensate for the loss of the two power barges which were initially operated by Therma Marine Inc. as ancillary power plants (https://mindanews.com/business/2010/10/ngcp-tmi-told-to-refund-power-consumers/)

From 70% reliance on renewable energy, hydro and geothermal, the frenzy of coal power plant construction that followed the 2010 power crises resulted in the transition to fossil fuel dependence in 2016, an oversupply by almost 2,000MW in the Mindanao grid, and expensive power.

Northern Mindanao which hosts around 70% of the installed coal capacity of Mindanao has the highest power rates. The regional capital Cagayan de Oro which is 90% dependent on coal has one of the most expensive power rates in the country.

No to LNG

Energy transition or shall we call it RE-transition is taking a sharp turn lately with serious take on the rehabilitation of the APHC. An unsolicited proposal for the rehabilitation, operation and management of the APHC from a Mindanawon company – Greenergy Devt. Corp. and state university – the University of Science and Technology of southern Philippines (USTP) seeks to extend the life of the aging, fully-amortized APHC to another 30 years and uprate its current generation back to a thousand megawatts. Right now, it only operates between 500-600MW, primarily because of ageing infrastructure.

The Energy Storage Project (ESP) is also proposed to be owned by Mindanawon power consumers, business and industries. A petition signed by over 20,000 Mindanawons supporting the ESP project has reached Malacanang. The DOE and PSALM are now listening, and hopefully, by August the requirement of the Public-Private Partnership (PPP) center will be complied, and the PSALM will proceed with reviewing it.

Mindanawons do not like LNG as transition fuel. In fact, opposition from locals and NGOs like the Philippine Movement for Climate Justice (PMJC) to the proposed 600MW LNG plant in Kauswagan, Lanao del Norte resulted in the scrapping of the project by GNPower  (https://mindanaogoldstardaily.com/archives/150034).

Early on, stakeholders are on the lookout for the rumored repurposing of the 200MW STEAG Mindanao Coal-fired Power plant in Villanueva, Misamis Oriental. The Build-Operate-Transfer contract of the STEAG plant, the last power plant constructed by the government in Mindanao will expire in 2031.

While LNG holds lower Carbon compared to coal and diesel, its transportation and process of liquifying is energy intensive, offsetting whatever emission reduction. It is imported; hence its prices are volatile like coal.

Business, Industries want Renewable Energy

A survey done last year by the Oro Chamber of Commerce and Industries listed high power rates as one of the top concerns by local businesses. Electricity expenses eat up 20-50% of their operational cost.

Worse for industries as they cannot expand, and new players are discouraged from pouring in more capital because of high power prices. Investors especially in the steel industry have backed out, said Almarco Brito, president of the Oro Chamber. Other industries, he said, have put on hold expansion plans until power rates go down. “Power rates result in low jobs generation,” he said in a power forum sponsored by the Consumers for Renewable Energy Action in Mindanao (CREAM).

Business, industries and consumers are looking at renewable energy, with the long-sought rehabilitation of the APHC, to provide price relief. The APHC’s generation cost is below 2 per kilowatt hour, compared to coal which can go up to more than 7 pesos.

While we expected the APHC rehabilitation mentioned in the recent State of the Nation Address of Pres. Bongbong Marcos, we are glad renewable energy and electrification are among his priorities.

The think-tank Institute for Climate and Sustainable Cities noted that the 200-power plant projects mentioned by the president consists of 90% renewable energy. ICSC however made a sobering reminder that part of the government plan is to bring in 970MW of new coal. I understand, at least 135MW of that would be from FDC’s MisOr Coal plant in Villanueva, Misamis Oriental.

In is reaction to the SONA, ICSC wrote:

“We laud the Department of Energy (DOE) for their continuous effort to facilitate rapid adoption of RE across the country, with nearly 200 power plants scheduled for commissioning for the next three years. Nearly 90% of these power plants will come from renewables – approximately 7.8 gigawatts (GW) from solar, 2.3 GW from wind, and 400 megawatts (MW) from battery storage – signaling a strong shift toward cleaner energy systems that will bring more affordable, reliable, and secure power for all Filipinos. However, we urge to expand the scope of the coal moratorium beyond greenfield coal projects, as 970 MW of the additional capacity in the next three years is still expected to come from the expansion of existing coal-fired power plants.” (https://icsc.ngo/icsc-reacts-to-4th-sona-more-urgent-climate-action-needed-equip-filipinos-to-adapt/)

It is important to note that energy stakeholders in Mindanao demand for clean, affordable and reliable fuel. That Mindanawons are now woke enough and cannot fall again to stealthy machinations to stifle its re-transition to at least renewable energy to fossil fuel parity or Mindanao 50:50 in 2030.

(MindaViews is the opinion section of MindaNews. BenCyrus Ellorin is a former newspaper editor. He is the president of the advocacy group and think-tank Pinoy Aksyon for Governance and the Environment Inc. He serves as the head of the advocacy committee of the Mindanao Renewable Energy Acceleration and Coordination Hub (MINREACH). Comments can be sent to bency.ellorin@gmail.com)