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Interview: Frank Thiel, Managing Director, Quezon Power (Philippines), Limited Co. (QPL)

Frank shares his views on Filipino power demand and on the future of coal in the Philippines and in Asia more generally.

Coaltrans Conferences (CC):  
The Philippines has one of the fastest growing economies in the world. How is this growth translating into power demand, and subsequently, thermal coal demand? What percentage of Filipino power demand is currently met with coal?

Frank Thiel (FT):  Indeed. The economy is growing at 5-6% and expected to continue that way for the foreseeable future. Annual power demand is expected to increase at 4-5% based on figures from the DOE. Most of the new projects are coal based. This means also that coal demand is expected to increase in the 2019 period as new plants come on line. Currently more than 40% of the power demand is met by coal.

CC: What quantities of thermal coal do you expect the Philippines will be importing in 2020?

FT: With the new units expected to come on line by 2019, I would expect an increase of 9-10M tonnes per year of additional thermal coal importation above the current levels.

CC: Asia is the only part of the world where investment into coal-fired power generation remains high. What is driving this? How long do you think that this commitment to coal can continue once carbon reduction commitments are taken into account?

FT:  Coal is still considered the lowest cost fuel of choice. The Philippines does not subsidize its power rates unlike most of Asia. Coal is likely to remain the fuel of choice for the Philippines for the next decade at least.

CC: What are the primary considerations that underline procurement strategy for Filipino utilities? Do you see this changing as power generation infrastructure develops?

FT:  Cost, quality, counterparty risk, security of supply. Will become more competitive due to increased demand.

CC: Renewable energy is booming in the Philippines. To what extent do you think renewables pose a threat to coal-fired power generation?

FT:  Booming may be a stretch. The penetration overall is <2% of the current installed capacity. We always lobby for an energy mix policy including RE. Doubtful that renewables can displace coal in the near term.

CC: Finally, you’re speaking at Coaltrans Emerging Markets Asia next month. What subjects are you most looking forward to hearing about?

FT: Fuel quality, reserves, mining plans, price forecasts.

November 2016.

This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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