Power cost in PH may increase due to Abu Sayyaf’s kidnapping of Indonesians

  • Indonesia will stop exporting coal to the Philippines because of the Abu Sayyaf kidnappings of Indonesians
  • The Philippines is heavily-reliant on coal in producing electricity
  • Over 90% of the Philippines’ coal demands rely on export from Indonesia

The recent abduction of 7 Indonesian sailors by Abu Sayyaf may adversely affect the power supply and its cost in the Philippines.

This is because Indonesia will stop exporting coal until the Philippines can guarantee the safety of Indonesian vessels making coal deliveries to the country that are being targeted by the Abu Sayyaf Group.

The Philippines is heavily-reliant on coal to produce electricity despite the government’s push for more renewable energy. In a July 2015 article written by Danessa Rivera of Philstar, Rivera wrote that according to the data from the Department of Energy (DOE), 70 percent of the committed power to come online until 2019 are coal-fired power plants.

Marguerite Afra Sapiie of The Jakarta Post said over 90 percent of coal demands of the Philippines rely on exports from Indonesia. Australia and Russia also supply coal to the country.

Coal importers can tap Australia and Russia, but a DOE official said this will mean additional costs that will be eventually passed on to consumers.

“There will be additional transportation costs if the coal will come from Australia or Russia, so that means additional costs will have to be passed on to power consumers,” said Rino Abad of the DOE.

Port Authorities in some areas in Indonesia stopped issuing permits to ships taking coal to the Philippines due to the frequency of attacks by the Abu Sayyaf.

Indonesia’s Coordinating Minister for Political, Legal and Security Affairs Luhut Bisnar Pandjaitan said the coal export moratorium will remain in effect until the Philippines can guarantee the safe passage of Indonesian vessels in Philippine waters.