Mindanao, the southern gem of the Philippines, finds itself at a pivotal moment in its quest for a sustainable energy future, grappling with the heavy burden of coal dependency that has long defined its power landscape. For decades, the region has endured crippling electricity costs, environmental degradation, and recurring power crises, all tied to an over-reliance on fossil fuels that now demands a transformative shift. As debates intensify over whether Liquefied Natural Gas (LNG) or renewable energy should replace coal, a growing chorus of stakeholders—from local communities to business leaders—argues that renewables offer the most viable path to affordability and sustainability. This pressing issue transcends mere policy; it touches the daily struggles of millions of Mindanawons who face high power bills and polluted environments. Exploring the historical roots of this crisis, the pitfalls of proposed alternatives like LNG, and the promise of renewable solutions reveals a clear direction for the island’s energy transition.
Unpacking the Burden of Coal Dependency
Mindanao’s energy challenges stem from a series of policy missteps that reshaped its power grid over the past few decades, moving away from renewable dominance to a heavy reliance on coal. In earlier years, hydro and geothermal sources accounted for nearly 70% of the region’s electricity, but by 2016, fossil fuels had taken over, driven by the privatization of critical power assets. Today, Northern Mindanao shoulders 70% of the island’s coal capacity, with cities like Cagayan de Oro depending on coal for 90% of their power needs. This shift has led to some of the highest electricity rates in the Philippines, placing a significant strain on households and local economies. The environmental cost is equally stark, as coal plants contribute to air and water pollution, harming both ecosystems and public health across the region. This historical pivot to fossil fuels has created a complex web of economic and ecological issues that now demand urgent resolution through a sustainable energy strategy.
The economic fallout from coal dependency is particularly evident in the struggles of Mindanao’s business sector, which faces electricity costs that often consume 20-50% of operational budgets, according to surveys by the Oro Chamber of Commerce and Industries. Industries like steel, which require substantial energy inputs, find expansion nearly impossible under such financial pressure, deterring investment and stunting job creation. Additionally, an oversupply of nearly 2,000 MW in the Mindanao grid paradoxically coexists with exorbitant rates, revealing inefficiencies in the current system. Communities bear the brunt of these high costs, with families forced to allocate a disproportionate share of their income to power bills, limiting their ability to afford other essentials. This dual burden of economic hardship and environmental damage underscores the pressing need to move beyond coal, setting the stage for a critical examination of what energy source should take its place in powering the region’s future.
Questioning the Viability of LNG as a Bridge Fuel
As the push to phase out coal gains momentum, some industry voices have positioned Liquefied Natural Gas (LNG) as a transitional fuel, citing its lower carbon emissions compared to coal as a key advantage. Recent reports have suggested that LNG could serve as a stepping stone, easing the shift away from coal while maintaining energy stability. However, this perspective faces sharp criticism from analysts who argue that such narratives may be driven by vested interests seeking to attract investment into the LNG sector. Despite its cleaner burn, LNG carries significant drawbacks, including the energy-intensive processes of liquefaction and transportation, which add to its environmental footprint. Furthermore, as an imported fuel, its pricing remains volatile, subject to global market fluctuations that could replicate the affordability issues seen with coal, leaving Mindanao vulnerable to external economic pressures.
Skepticism toward LNG extends beyond theoretical concerns to active resistance from local communities and advocacy groups across Mindanao, who view it as a false solution. The Philippine Movement for Climate Justice, for instance, played a pivotal role in blocking a proposed 600 MW LNG plant in Kauswagan, Lanao del Norte, reflecting widespread public opposition. Concerns also linger over plans to convert aging coal facilities, such as the STEAG Mindanao plant in Villanueva, Misamis Oriental, into LNG operations after its contract ends in 2031. Such proposals are met with distrust, as stakeholders worry that LNG merely prolongs fossil fuel dependency rather than breaking free from it. The combination of environmental costs, economic risks, and grassroots pushback highlights that LNG fails to align with the region’s long-term goals of sustainability and affordability, prompting a deeper look into alternative energy pathways that better serve local needs.
Championing Renewables for a Sustainable Future
Turning away from fossil fuel alternatives like LNG, renewable energy emerges as the most promising solution for Mindanao’s energy transition, with the potential to deliver both environmental and economic benefits. Central to this vision is the rehabilitation of the Agus-Pulangi Hydroelectric Power Complex (APHC), a network of six hydropower plants along the Agus River that once powered much of the region. Currently operating at a diminished capacity of 500-600 MW due to aging infrastructure, the APHC could reach 1,000 MW with targeted upgrades, as proposed by entities like Greenergy Development Corporation in collaboration with local academic institutions. Such revitalization promises to restore a reliable source of clean energy while slashing generation costs to as low as 2 pesos per kilowatt-hour, a stark contrast to coal’s 7 pesos or more. This initiative could redefine Mindanao’s energy landscape by prioritizing sustainability over short-term fixes.
Beyond the APHC, broader renewable energy projects and community-driven efforts further bolster the case for a cleaner future in Mindanao, reflecting both local and national momentum. The Energy Storage Project (ESP), backed by a petition from over 20,000 Mindanawons, advocates for local ownership of power resources, ensuring that benefits directly reach consumers, businesses, and industries. Nationally, the government’s commitment to renewables is evident, with nearly 90% of planned power plants over the next three years focusing on solar, wind, and battery storage, amounting to thousands of megawatts in capacity. This policy direction aligns with Mindanao’s needs, offering a chance to lead the Philippines in adopting sustainable energy practices. Yet, challenges remain, as plans for new coal capacity, including a 135 MW plant in Villanueva, Misamis Oriental, signal lingering contradictions in the transition strategy, necessitating stronger advocacy to prioritize renewables unequivocally.
Building Momentum for a Renewable-Powered Mindanao
Reflecting on Mindanao’s energy journey, the shift from coal dominance to a renewable-focused grid marked a turning point driven by persistent community advocacy and evolving national policies. Local opposition has successfully challenged fossil fuel projects, including LNG proposals, while support for initiatives like the APHC rehabilitation grew stronger, fueled by a shared vision of cheaper, cleaner power. Economic pressures, once exacerbated by high electricity rates, began to ease in areas where renewable projects took root, offering a glimpse of the potential for broader regional recovery. Environmental improvements followed suit, as reduced coal usage lessened pollution burdens on communities long affected by industrial fallout. These strides, achieved through collective determination, underscored the power of prioritizing sustainability over temporary fossil fuel alternatives.
Looking ahead, the path to a fully renewable-powered Mindanao requires sustained collaboration among policymakers, investors, and local stakeholders to accelerate projects like the APHC upgrades and the ESP. Expanding the coal moratorium to halt not just new plants but also expansions of existing ones stands as a critical next step to align actions with ambitions. Financial mechanisms to support renewable infrastructure, alongside public education on the benefits of clean energy, can further cement this transition. As Mindanao builds on past lessons, the focus must remain on empowering communities to shape their energy future, ensuring that affordability and environmental stewardship guide every decision. This forward-looking approach offers a blueprint for other regions in the Philippines and beyond, proving that a sustainable energy shift is not just possible but essential for long-term prosperity.
