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COVID-19, Coal, and the Energy Transition in the Philippines

Author

Listed:
  • Majah-Leah V. Ravago

    (Economics Department, Ateneo de Manila University)

  • James A. Roumasset

    (Economics Department and UHERO, University of Hawaii)

Abstract

The lockdown associated with COVID-19 caused a sizeable downward shock to electricity demand in the Philippines. Although coal is usually classified as a “baseload†fuel, it ironically bore the brunt of adjustment in the generation mix. The resulting upward pressure on retail prices was offset by force majeure contract provisions that allowed distribution utilities to pay lower fixed charges on their power purchase agreements. Coal generators thus suffered the double whammy of lower sales at lower rates. While existing coal plants will contribute to affordability during the recovery, plants in the planning stage may be reevaluated in light of the falling cost of wind and solar power and the low costs of dealing with intermittency when the percentage of intermittent generation is low. The Department of Energy’s “technology neutral†policy towards the generation mix is sound so long as least cost is interpreted to include the social costs of pollution. Some changes in renewable energy policy are indicated.

Suggested Citation

  • Majah-Leah V. Ravago & James A. Roumasset, 2020. "COVID-19, Coal, and the Energy Transition in the Philippines," Department of Economics, Ateneo de Manila University, Working Paper Series 202009, Department of Economics, Ateneo de Manila University.
  • Handle: RePEc:agy:dpaper:202009
    as

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    File URL: http://ateneo.edu/sites/default/files/downloadable-files/ADMU%20WP%202020-09_1.pdf
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    References listed on IDEAS

    as
    1. Roumasset, James & Ravago, Majah-Leah & Jandoc, Karl & Arellano, Clarissa, 2016. "Environmental Resources, Shocks, and National Well-Being," MPRA Paper 87715, University Library of Munich, Germany.
    2. Rudnick,Hugh & Velasquez,Constantin, 2019. "Learning from Developing Country Power Market Experiences : The Case of the Philippines," Policy Research Working Paper Series 8721, The World Bank.
    3. Rudnick,Hugh & Velasquez,Constantin, 2019. "Learning from Developing Country Power Market Experiences : The Case of Colombia," Policy Research Working Paper Series 8771, The World Bank.
    4. Rudnick,Hugh & Velasquez,Constantin, 2019. "Learning from Developing Country Power Market Experiences : The Case of Peru," Policy Research Working Paper Series 8772, The World Bank.
    5. Majah-Leah Ravago & James Roumasset, 2016. "The Public Economics of Electricity Policy with Philippine Applications," Working Papers 201613, University of Hawaii at Manoa, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    COVID-19; Electricity industry; Energy transition; Philippines;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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