Update

January 18, 2024

Coal Refinancing in the Philippines

Using the Coal Asset Transition (CAT) tool

Data

Fossil Fuels

Summary

The average abatement cost to buy and replace coal plants in the Philippines is $140/tCO2, comprising $41/tCO2 to 'buy-out' supply agreements and $99/tCO2 to replace them with solar plus storage. The high marginal abatement cost stems from high profitability in Power Supply Agreements (PSAs) within the country's current tariff structures, which include fuel cost pass-throughs that see consumers bearing the cost of high fuel prices and not benefiting from savings when prices drop. TransitionZero’s Coal Asset Transition (CAT) tool shows a wide range in buy-out costs, between $0.02 million/MW to $2.8 million/MW, or $1/tCO2 to $145/tCO2. Nonetheless, the primary cost of phasing out coal lies in replacing it with clean, dispatchable alternatives like solar PV coupled with battery storage.

Retiring coal plants five years ahead of schedule could prevent 290 million tons of CO2, double the Philippines' annual CO2 emissions, aligning the country with the Paris Agreement's objectives. Without policy changes, coal plants will continue operating unabated into the early 2050s. Although the country's fleet is relatively young, retiring coal plants five years early could lead to their decommissioning around 2040. To catalyse refinancing for early retirement, the Philippines requires a clear policy incentive.

The forced outage rate for coal plants averaged 9% from 2020 to 2022, debunking the common belief that they provide uninterrupted 24/7 power. The unreliability is evident as they often go offline at large capacities, impacting the overall system stability. Coal technology in the Philippines does not make the contribution to system reliability that should be expected. To address this risk and facilitate coal retirement, it's essential to diversify the energy mix, enhance flexibility, and improve the transmission capacity and the overall connectivity of the power grid.

Structuring deals and refinancing transactions for coal power is a complex task, requiring consideration of characteristics and realities at the plant level. In the liberalised power sector of the Philippines, it's common for many PSAs to be signed with a single coal plant, each featuring different contracted capacities and remaining durations. Consequently, renegotiating these PSAs involves a complex process with multiple counterparties. Retirement strategies could include options like shutting down individual units first or buying out generation instead of capacity.

The Philippine Energy Transition Plan (PETP) needs to incentivise early movers, ensuring that plant owners view early refinancing as a core strategy. Despite their current profitability, coal plants face the risk of becoming stranded assets due to shifts in regulatory, business, and political climates, which are likely to exert increased pressure on ongoing coal operations. It is essential to establish robust selection criteria to accurately determine transition schedules and guarantee that appropriate transition finance is made accessible.

The CAT tool is vital to support coal plant refinancing decisions and guide the Philippines' energy transition strategy. The CAT tool provides reliable historical data to support negotiations regarding asset value and PSA buy-outs. Although determining fair value is subjective, having access to PSA data and understanding the ownership structures of coal plants are key to ensuring that valuations reflect the complexity of the Philippine market. While further due diligence is necessary for financing deals per asset, the CAT tool is invaluable for evaluating coal plants, guiding refinancing schedules, and informing policies during the Philippines' energy transition.

The Philippines is at an inflection point in its energy transition. In September 2023, the Philippine government unveiled its Philippine Energy Transition Plan (PETP), outlining four strategic initiatives to increase affordable, reliable, and clean power in the country. The voluntary retirement and/or repurposing of coal plants is among the focus areas, bolstered by the three other pillars: accelerating the deployment of renewable energy, upgrading the grid, and enhancing port infrastructure for offshore wind development.

In addition to aligning with climate targets, the PETP seeks to address a lack of investment in energy infrastructure in the Philippines that has contributed to high electricity prices and unreliability in the system. Incidents such as the extended blackouts that took place in some parts of the country following forced coal plant outages in the first week of 2024 highlight that accelerating a managed energy transition should be a clear priority for the country’s energy planners.

Observing the experience of the Just Energy Transition Partnership (JETP) programs of South Africa, Indonesia, and Vietnam, the PETP underscores the importance of a country-led energy transition to pinpoint key investment areas and projects to attract funding and expedite the shift towards clean power. Considering the intricacies of the Philippine power sector, designing the right screening criteria for asset-level coal buy-outs and incentivising voluntary refinancing will be a key challenge.

This blog analyses new data from TransitionZero's Coal Asset Transition (CAT) Tool as it relates to the Philippines. The results indicate that the energy transition should focus on more than just coal assets to bolster the grid's resilience and ensure affordable and reliable electricity. Rather, a holistic transition and coal retirement mechanisms will need to be backed by data to account for the diverse stakeholders and the diverse factors that determine the reliability and profitability of coal assets in the Philippines.

What is CAT?

The Coal Asset Transition (CAT) Tool is an open data product that provides asset-level information to inform refinancing and replacement decisions for coal plants. Specifically, for the Philippines, it provides estimates on the cost of buying out remaining power supply agreements (PSAs, often referred to as PPAs), which are pivotal to the economic viability of each coal unit. In addition, CAT evaluates various parameters such as long-term profitability, the remaining lifespan of each asset, and the levelised cost of transitioning to clean power sources, as well as incorporating battery storage. This facilitates a comprehensive screening process to determine which coal plants might be suitable for retirement. Beyond economic considerations, CAT also gauges societal impacts. It estimates the tangible costs associated with emission reductions as well as the potential job losses resulting from the closure of each coal unit.

With this data, policymakers, planners and financiers can use the CAT Tool for:

High-level screening to identify plants that can be prioritised for coal refinancing based on various screening metrics
Asset-level deep dives into financial metrics, operating costs, and environmental and social externalities
Identification of candidates for coal phaseout at the asset level based on criteria most important to the end user

To illustrate the tool's capabilities and the data collection process it entails, we provide case studies related to potential use cases within our analysis slidedeck.

The CAT Philippines Methodology

The analysis encompasses all 58 operational coal units in the Philippines, drawing from information collected from 209 PSAs. These PSAs represent approximately 65% to 75% of coal generation. Notably, nearly 90% have either comprehensive or partial generation and pricing data available from the period of 2020 to 2023. This data is used to estimate the cost of buy-out.

We offer conservative estimates of buy-out costs, which may differ from actual deal valuations or structures that may arise. While our PSA data collection is thorough, its emphasis is predominantly on the captive market controlled by distribution utilities (DUs) and electric cooperatives (ECs). In particular, estimates omit:

Revenues from the wholesale electricity market (WESM), which represent around 15% of coal generation but are increasing year on year.
Most bilateral contracts for contestable customers (those with the autonomy to select their power suppliers) in the retail electricity market account for 15% to 25% of generation.

Because the Philippines has a fully liberalised power sector, multiple PSAs can be associated with a single asset. This explains the existence of over 200 PSAs for the 58 coal units. A coal plant can only be decommissioned after the last associated PSA has expired. In our analysis, we estimate the "cost of immediate buy-out," which projects the expenses associated with terminating all active PSAs for an immediate plant closure. Additionally, we estimate the "cost of early retirement," where the buy-out period is limited to a maximum of five years. A five-year maximum buy-out was selected to account for the vast differences in the remaining durations of existing PSAs, which range from 1 to 28 years. Given that buy-out negotiations in the Philippines may involve multiple counterparties, we felt that five years was a short enough time frame that it is possibly bankable across several different contracts while bringing the country’s phaseout date closer to the ideal timeframe for net zero (i.e. before 2050).

Given the varied conditions across the three main island groups in the Philippines, we refrained from segregating the data by regional grids. Although the reserve margin is above 45% at the system level, the reliability of regionally significant coal and oil plants varies significantly, imposing high costs on some communities. Instances exist where these plants unexpectedly halt operations, resulting in gigawatt-scale outages that persist for significant time frames and incur economic losses for residents and businesses.

The Philippine power sector explained

The Philippines is an expansive archipelago in Southeast Asia, comprising over 7,600 islands that stretch approximately 1,850 kilometres. With a population nearing 110 million, a significant segment resides on the main island of Luzon, which houses the capital city of Manila. This region is not only the nation's economic and political nucleus but also its most populous area. The rest of the populace is scattered across the major island groups of Visayas and Mindanao. Classified as a lower-middle-income nation, the Philippines has a GDP per capita of around US$3,000. Despite its abundant potential for renewable energy sources, such as geothermal, hydro, solar, and wind, the country has traditionally depended on imported fossil fuels to meet its energy demand. Consumers pay for some of the highest electricity rates in the region due to high generation costs associated with dependence on fossil fuels, coupled with mechanisms that allow generators to pass on fuel costs to consumers. As a result, transitioning to sustainable energy is pivotal for the Philippines, both economically and environmentally.

The energy sector in the Philippines is fundamentally governed by the Republic Act No. 9136, known as the Electric Power Industry Reform Act (EPIRA) of 2001. EPIRA was established by the Philippine Congress and set out a comprehensive framework for the restructuring of the electricity industry. Enforcement is supplemented by various implementing rules and regulations, and occasionally by additional mandates from both national and local government bodies; thus introducing complexities in the regulatory landscape. The Philippine Energy Plan (PEP) outlines the country's long-term energy vision and objectives and is updated by the Department of Energy (DOE) every two years. The PEP guides specific strategies and plans, addressing both demand and supply aspects, and investment policies to achieve the targets set by EPIRA. The Renewable Energy Act of 2008 (Republic Act No. 9513) provides the legal and institutional framework to harmonise the development and utilisation of indigenous and new and renewable energy resources, including the creation of incentives, tariff-based instruments, and quantity-based instruments. Several stakeholders, such as independent power producers (IPPs), DUs, and ECs, handle the generation and distribution of electricity. The National Grid Corporation of the Philippines (NGCP), a private entity 40% owned by the State Grid Corporation of China, oversees the transmission and management of the nation's power grid. Although NGCP is in charge of transmission operations, the country’s transmission infrastructure ownership remains with the National Transmission Corporation (TransCo), a government-owned and controlled entity. As for regulatory bodies, the DOE is the primary agency overseeing energy policy in the Philippines. Specialised bureaus and offices, including the Energy Resource Development Bureau and the Renewable Energy Management Bureau, focus on particular segments of the energy landscape. Furthermore, the Energy Regulatory Commission (ERC) acts as an autonomous regulator and is responsible for enforcing the rules and regulations set by EPIRA, approving power supply and Ancillary Service Procurement Agreements, and determining distribution wheeling rates. Within the legislative branch, the Joint Congressional Power Commission (JCPC) maintains oversight powers over the entire energy sector. This structure and its players – most of whom are mandated to prioritise the protection of consumer interest and market competition – create a distinct dynamic within the sector that allows for legal oversight for tariff setting, market design, and system operations. Given the pivotal role of energy in the Philippine economy, energy policy is intricately linked with broader government strategies. For instance, the objectives of the energy sector are integral to the Philippine Development Plan, crafted by the National Economic and Development Authority.

Relative to other Southeast Asian nations, the Philippines' power market is sophisticated, with WESM operating as an energy-only gross pool with net settlement. It operates without centralised planning, meaning while the DOE releases long-term forecasts and projections, such as the PEP and NGCP’s Transmission Development Plan (TDP), the power sector in the Philippines aims to function as a free market. Despite this, government policies play a significant role in setting the tone. There are linkages between various policies and market-driven policy instruments, including the Renewable Portfolio Standards (RPS) and the Green Energy Auction Programme (GEAP). The DOE sets the RPS requirement at a minimum annual incremental percentage increase, which has recently been adjusted upwards to 2.5% per year starting in 2023. Historically, the primary source of growth in generation capacity was coal. However, a shift occurred in late 2020 when a moratorium was placed on new coal-fired power projects, with exceptions made for those already under construction. This move reflects the Philippines' ambition to attain 35% of its energy from renewables by 2030, as indicated in the PEP and the National Renewable Energy Program (NREP). The drive to achieve RPS benchmarks motivates DUs and ECs to integrate renewable sources into their generation mix. Moreover, the introduction of the Green Energy Option Program (GEOP) enables substantial end-users (those with a consumption exceeding 100 kW) to establish direct contracts with renewable energy providers. Currently, there are proposals in the legislative and executive branches to develop a downstream industry for importing liquified natural gas (LNG) as a “bridge fuel”, given the depleting domestic reserves of the Malampaya gas fields. In off-grid areas, reliance on emission-intensive, expensive, and unreliable diesel and bunker oil plants should be subject to further scoping for retirement. There are several pathways through which power generation projects are servicing demand in the Philippines. These include long-term regulated contracts, direct PSAs through competitive selection processes (CSPs), sales in the WESM, government auctions, and the upcoming monetisation of renewable energy certificates. Renewable energy sources, particularly solar and onshore wind, are gaining traction due to their cost competitiveness and growing policy support. The ongoing deregulation of the retail sector is also creating opportunities for power offtake. It's important to note that, regardless of the WESM, bankability for a project usually requires securing an adequate number of bilateral contracts, which often necessitate regulatory approval.

Key findings from CAT Philippines

The average estimated abatement cost to buy and replace coal plants is $140/tCO2, comprising $41/tCO2 to 'buy-out' existing supply agreements and $99/tCO2 to replace them with solar plus storage systems.

One of the most significant contributions of the CAT tool is to provide cost of abatement estimates at a plant level. The data shows a wide range in the cost to retire coal assets early by buying out a maximum of five years on the plants’ existing PSAs. This ranges from $0.02 million/MW to $2.8 million/MW, or $1/tCO2 to $145/tCO2, indicating that some coal plants would be cost-effective candidates for early retirement.

The CAT dataset finds that for the majority of coal plants, PSA contracts often deliver elevated profitability under the country’s existing tariff structures. Full fuel cost pass-through results in consumers bearing the cost of elevated fuel prices when global markets are tight. Plants are also under no obligation to pass on fuel cost savings when prices are low. Additionally, the different contractual obligations and PSA durations affect the buy-out value of plants. For instance, the SMC Limay power plant, which has only 5% of its capacity contracted under PSA agreements, has the lowest estimated early retirement cost. Actual retirement deals for the asset would have to account for its high WESM sales, which will likely result in significantly higher refinancing demands than estimated in the CAT analysis.

Nonetheless, the primary cost of phasing out coal lies in replacing it with clean, dispatchable alternatives. To meet the Philippines’ growing electricity demand and maintain grid stability, replacing the retired coal capacity is essential. CAT data estimates that replacing coal plants in the Philippines with solar PV + storage systems amounts to $99/tCO2.

Abatement costs for coal units hold particular relevance in guiding refinancing initiatives as the country grapples with environmental and economic challenges associated with coal dependency. Quantifying these costs at an asset level, as CAT does, can enable investors and policymakers to evaluate holistically the economic feasibility of transitioning to cleaner energy alternatives in an increasingly competitive market.

Without policy reform, unabated coal will persist until the early 2050s

The CAT tool suggests that the coal fleet in the Philippines is expected to remain operational until the late 2040s or early 2050s, depending on whether plants will be allowed to operate until the end of their economic life or until the last of their existing PSAs expire. Given the ownership structures and the largely risk-free PSAs most coal plants operate under, there's limited motivation for early coal plant shutdowns without direct governmental action and policy reform.

System and capacity adequacy are major concerns for the country. The forced outage rate for coal plants averaged 9% between 2020 and 2022. Contrary to popular belief, coal plants can be extremely unreliable when not maintained adequately, and the system has suffered from a pattern of large units coming offline and affecting the overall stability of the system. This highlights the need to diversify the energy mix, reduce the reliance on underperforming coal units, increase flexibility, and improve the transmission capacity and connectivity of the grid.

The government plays a crucial role in providing clear policy direction. In addition to pursuing the priority investment areas under the PETP, the government should consider a net-zero target, paired with detailed guidelines to phase out unabated coal while ensuring the country’s needs are met. This would provide a definitive benchmark for decision-making across the power and energy sector.

Retirement selection criteria will need to account for the complexities of the Philippine market

Data from the PSAs provided in the CAT tool shows significant variation in the duration and capacity of contracts associated with different plants. Notably, some older plants are tied to extended PSAs with a duration of 25 to 32 years. These long-term agreements can stretch the operational life of existing plants past their technical life. In contrast, some newer plants have shorter PSA durations that were meant to avoid locking in tariff prices, which could now facilitate an early transition schedule.

Strategic planning is crucial when considering PSA buy-outs. Without careful management, there's a risk that ending PSAs prematurely might inadvertently prolong the life of older, more polluting plants with long-duration agreements. An important consideration for the selection criteria should be to retire older, less efficient plants first, ensuring that newer and well-maintained facilities with lower emissions intensities aren't closed because of their shorter PSAs.

Additionally, retirement and refinancing deals must consider the unique responsibilities of DUs and ECs to represent consumer interest and secure affordable and reliable power for their customers. Multiple PSAs with different structures mean that many counterparties will need to be involved in negotiations. It will be important to anticipate the needs of diverse stakeholders and will require careful deliberation to balance the priorities of different groups. From a purely practical perspective, it may mean that bankers will favour coal refinancing deals that involve fewer counterparties, regardless if this would target the least efficient and highest emitting coal units.

Windfall profits for generation companies, regardless of coal prices or grid value, are a cause for concern

In the Philippines, PSAs act as binding commitments between generation companies (Gencos) and their buyers. These agreements are structured in a way that shields Gencos from financial risks. These risk-free structures have often been used in markets where banks have been unwilling to take power market price risk and companies have been unwilling to hedge fuel price risk. Our analysis of PSA data from 2020 to 2023 shows a consistently healthy financial performance of coal plants in the Philippines, despite fluctuations in coal prices. Coal plants consistently exhibit profit margins within the range of $30/MWh to $80/MWh. This level of returns, even in the face of significant market volatility, highlights the risk-averse nature of the PSAs, at the expense of the Philippine rate-payers. The embedded fuel cost pass-through mechanism plays a major role in sustaining these profit margins and bank returns. When global coal prices surge, this mechanism kicks in, and consumers bear the brunt of increased electricity bills. Consequently, Gencos are safeguarded from spot market fluctuations, while consumers endure the impact of high coal prices yet gain no advantage from low prices.

Given the complexity of the power sector return profile, CAT’s dataset can help establish the appropriate value for asset buy-outs. Due diligence will also be needed to identify abnormal returns that could distort valuations. In some instances, a high tariff might be attributed to underperformance since fixed capital recovery charges are distributed over reduced generation. This creates a disincentive that may potentially lead to overvaluation of underperforming assets. In addition, the true cost of operating coal plants in the Philippines should factor in externalities associated with air pollution and water stress, which directly impact the host communities.

Refinancing needs to enable renewables and reposition the industry

Early coal retirements should foster investments in clean energy and support companies transitioning to a carbon-neutral future. Given the financial stability that PSAs offer, coal plant sponsors may be hesitant to forego significant expected future revenues. The prudent use of funds derived from mechanisms such as the PEPT and the ADB’s Energy Transition Mechanisms (ETMs) is critical to ensuring that clean energy is replacing coal retirement at the necessary scale and pace

Renewables are already becoming increasingly cost-competitive in the Philippines. Bid prices on GEAP-2 averaged $78/MWh for ground-mounted solar and $102/MWh for onshore wind – below the average coal tariff of $139/MWh. Coal plant owners will need to be aware of the risk of stranding as the changing regulatory, business and political climate will see continued coal operations come under pressure. RE already has the potential to capture a meaningful share of the contested market.

Additionally, with over 150 DUs and EOs, funds and investments should be allocated to upgrading the electrical grid. Such modernisation will facilitate the integration of variable RE sources and bolster grid reliability and resilience. By channelling investment into clean energy projects and infrastructure enhancements, DUs, ECs, and the general public can benefit from a more cost-effective system, making early retirement arrangements more viable and equitable.

For constructive stakeholder engagement to be effective, a unified foundation of verifiable data, like the one CAT offers, is indispensable. Given the voluntary nature of PETP's coal retirement and repurposing strategy in the Philippines, it's vital to support transparency to build credibility before offering targeted incentives to encourage early movers. When all market participants can assess their asset portfolios, and those of competitors in the system, it’s easier to identify stranding risks and new clean energy investment opportunities.

Case studies

QPPL, CEDC, and SCPC units offer notable early retirement potential

CAT provides a foundation for examining relevant criteria for early retirement options, allowing users to analyse individual deal considerations and test potential retirement strategies. This could include the prioritisation of plants with expiring PSAs, those with the highest emissions intensity, or those with the lowest availability factors.

The Quezon power plant (QPPL) emerges as a compelling candidate if PSA expiry dates are prioritised. The plant is fully amortised and has a single PSA with Meralco set to expire in May 2025. Notably, QPPL is highly profitable as it is supported by above-average tariffs. It is also a candidate for ammonia co-firing pilot testing, which could extend the life of the plant. Any deal for this asset is expected to be uniquely structured around its future revenue potential. Established under a Build-Own-Operate scheme, plant owners would retain control over the asset and innovative financing options could create incentives for permanent decommissioning and repurposing of the plant site upon the expiry of its only remaining PSA.

A retirement deal involving the Cebu Energy Development Corporation (CEDC) – one of the grid's most polluting power plants – would look very different. CEDC exhibits average profitability, with tariffs consistent with the national average. It has 38% of its capacity contracted through five PSAs. The remaining capacity operates under an ancillary service purchase agreement with NGCP. Given the plant's relatively recent commercialization date, it is unlikely to be fully amortised. Thus, a two-tiered approach might be suitable; first shutting down one unit by buying out 4 PSAs expiring in the next five years, then buying out five years of the VECO-CEDC contract to decommission the remaining unit by 2031. This approach keeps one coal unit in operation to offer ancillary services, ensuring grid stability, covering initial capital investment cost, and allowing more time to deploy renewable generation.

Lastly, the SEM-Calaca Power Corporation (SCPC) plant stands out, given its age and susceptibility to unplanned outages. Unit 2 went offline due to extended maintenance and generator issues for the majority of 2020 and 2021. Despite a 29% capacity factor and only 10% of its capacity contracted under PSAs, SCPC generated a net income of PHP 5.1 billion (US$93 million) in 2022, largely due to its engagement in WESM. Given the placement of SCPC on the Luzon grid, other generators in the same service could potentially provide the same capacity at a lower emissions intensity. Any deal would need to incentivise SCPC towards early retirement by ensuring improved operations of the plant and the promotion of RE investments.

Detailed case studies on all of these plants can be found in the analysis slide deck. Further due diligence that builds on CAT data will be necessary in designing deal structures and calculating valuations.

Policy guidance

Recognizing the unique characteristics of the Philippines, any early coal retirement mechanisms must be tailored to the country's specific circumstances. Market dynamics and resource adequacy across the three main grids add complexity, requiring a nuanced, localised approach. Unique plant-level characteristics, highlighted in the case studies above, emphasise the need for customised and innovative deal structures.

A strong policy signal, like a net zero target, may underscore coal's exit from the Philippine energy landscape and open domestic and international climate financing options. Given several of the Philippine banks have pledged to stop financing coal, deals will need to have assurances or ring fencing for renewable energy development and grid enhancements baked into them.

Motivating early action emerges as a critical aspect of the PETP. While coal plants are presently profitable, the looming risk of asset stranding calls for proactive measures. Encouraging and supporting coal plant owners to retire their assets early, and ensuring the new capacity comes online to replace it, should prevent a tumultuous transition for the power sector.

Moving forward, there is an opportunity to use and layer the CAT tool’s rich dataset to offer more complete and strategic insights to facilitate refinancing deals and retirement schedules.

Firstly, targeting coal plants in high renewable energy resource areas optimises existing transmission lines. Layering geospatial data on renewable energy potential and grid access with coal plant coordinates identifies sites with high potential for redevelopment and existing grid connections. This could provide a shortlist of plants and sites for research into the rights for redevelopment.

Secondly, utilising CAT data alongside coal outage and ownership information aids targeted engagement and prioritisation. Grouping the portfolio by large and small asset owners allows for the identification of different priority plants and deal structures. Considering the grid location of the plant is essential to avoid issues with unplanned outages, and negotiations should account for unreliable operations resulting in supernormal profits.

Lastly, modelling by a target coal phase-out year is paramount. Total emission reduction and the cost of buy-out depend on the country's schedule for coal phase-out. Scenarios can be modelled based on the maximum useful life for existing and in-construction coal plants or specific phase-out target dates aligned with system requirements and considerations. This comprehensive approach, coupled with the CAT tool, will contribute to a smoother and more effective transition towards a sustainable energy future for the Philippines.

The power sector transition needs a system-level solution

The CAT tool offers an unmatched level of insight into individual coal plants to better inform retirement options. However, this data is only a snapshot of the system at a specific moment. To account for the economic and operational nuances of the Philippine grid and plan for replacement power over time, the impacts of coal retirement on the system need to be understood. For this reason, TransitionZero has built Model Builder, an energy system modelling platform that provides net-zero, least cost, and current policy scenarios to inform planning and decision-making for 165 countries.

The process of phasing out coal assets for coal-dependent nations remains intricate and fraught with complexity. Such transitions necessitate meticulous planning and broad stakeholder consensus. Model Builder will enable users to run scenarios to answer questions on system costs, future generation dispatch, and capacity expansion with more ease, enhancing their capability to respond to important policy and market changes, such as coal plant retirement.

As enthusiasm for the PETP and the overall investment landscape of the Philippines grows, consensus building and alignment will be essential. On the one hand, financiers must trust that capital mobilised through the PETP and other ETMs will be used optimally. On the other hand, key stakeholders are unlikely to be incentivised to transition away from coal without a bankable investment plan, grid development, and sustained improvements in the power market. Detailed datasets like CAT and advanced energy systems analytics tools like Model Builder could be instrumental in bolstering investor and policymaker confidence and establishing a viable, country-led energy transition plan for the Philippines.

Download the CAT Philippines dataset