Philippines to look for coal outside Indonesia

The Energy Department of the Philippines has asked power plant companies to look for other sources of coal outside Indonesia as the latter has banned its vessels from sailing to the Philippines amid security concerns.

?We have other sources?Russia, Australia, Vietnam. They can source from there but the quality requirement is different and power plants would need to negotiate for their respective new contracts. Hopefully, we will not reach that scenario,? Energy Secretary Zenaida Monsada said on Monday as quoted by local reports.

The Philippines imported about 15 million tons, or 70 percent of its coal requirements from Indonesia in 2015. About 80 percent of the volume was used for power generation. The country imported the remaining from Vietnam, Russia and Australia.

The Indonesian Ministry of Transportation last week banned Indonesian ships from sailing to the Philippines after two coal barges were hijacked by the Abu Sayyaf rebel group, which also took hostage seven crew members.

Monsada, however, said coal sourced from other countries were more expensive due to logistics cost.

?Right now we are not seeing any impact [of the ban on coal supply],? Monsada said. ?It?s not yet a cause for alarm. We have an inventory and if we look at what happened before [in April when a previous ban was in effect], it will have no impact on us,? she said.

Monsada also downplayed the possibility of a blackout, because of insufficient coal supply for local coal-fired power plants. ?Not in the immediate future, because the plants have 20- to 30-day inventory for power plants. There?s a required inventory and continuous importation,? she said.(*)