DOE assures ample coal inventory

MANILA, Philippines - The Indonesian government’s decision to ban all ships from sailing to the Philippines is not a cause for alarm in the local power industry as operators of local coal plants still have around a month-long inventory and are currently looking for alternative sources of coal, the Department of Energy (DOE) said yesterday.

In a briefing, DOE Secretary Zenaida Monsada said power outages are not seen in the immediate future as coal plant operators are required to have around 20 to 30 days of coal inventory.

“We have imposed a requirement on them. Based on our circular, they should have 20 to 30 days of inventory, including those in transit,” she said.

Monsada said the agency is now collating information on those coal reserves that are in transit. “We need to see the delivery schedules to see if there are deferred coal shipments,” she said.

Meanwhile, coal operators are also looking for other sources of coal and alternatives include Australia, Russia and Vietnam, the energy secretary said.

“In case the Indonesian source is not available, we have other sources like Australia, Russia and Vietnam but these will have a different quality. (Operators) of power plants would (also) need to negotiate for their respective new contracts,” she said.

Last week, the Indonesian government banned any Indonesian-flagged vessel to sail to the Philippines following abductions in the Sulu Sea by armed groups. The ban also covers vessels containing coal shipments.

Monsada clarified all coal shipments are not made using Indonesian flag-bearing vessels.

While the ruling is not yet seen to have an immediate impact, the DOE elevated its concern to Malacañang, the Department of National Defense (DND) and the Department of Foreign Affairs (DFA) since Indonesia is the country’s major source for coal, Monsada said.

“So far, the DFA has had talks with Malaysia and Indonesia for security but we don’t know at what level they are in their agreement,” she said.

Based on DOE’s 2015 data, Indonesia accounts for 95 percent of the country’s total coal imports, amounting to 16.56 million metric tons.

In terms of coal usage, 79.77 percent is used in power generation, 15.22 percent in the cement industry and 5.02 percent in industrial and direct processing industries.