MANILA

Algo: Achieving energy resilience and sustainability in post-Covid-19 Philippines

THE energy sector is one of the most affected by the Covid-19 pandemic. Economic lockdowns have caused significant drops in energy demand, oil prices, and pollution compared to previous years. It has also showcased the resilience of renewable energy (RE) and raised questions about energy resilience to future crises.

The Philippines faces numerous challenges regarding its energy sector. RE development is far behind the expected level of use, leaving most of the country's potential still untapped. While RE capacity is growing, coal is actually becoming more dominant in the country's energy mix.

While recovering from Covid-19 is a priority, the Philippines must strengthen long-term energy strategies aligned with international targets for climate action and existing national legislation while still meeting the growing energy demand and fueling economic growth.

The supply side

One of the most urgent actions is to strengthen the implementation of the RE Act, especially as key provisions remain unimplemented. These include the Renewable Portfolio Standards, which requires distribution utilities to obtain a minimum share of energy from renewables, and the Green Energy Option, which allows consumers to choose RE as their energy source.

The Department of Energy (DOE) must lead in fast-tracking their implementation, following the directive of President Rodrigo Duterte in 2019. The RE share in national power generation has dropped to 23 percent in 2018 from 34 percent in 2008, the year the RE Act was enacted.

The DOE, in cooperation with other agencies, must also lead in creating an enabling environment for attracting investments in RE development.

Sustainable finance has increased significantly in the past decade, a sign of a more climate-conscious global market. The green bond market has grown from USD 3 billion in 2011 to USD 895 billion in 2018, with half of this allotted for clean energy. These developments helped drive down the cost of solar and wind energy to be cheaper than coal in two-thirds of the world.

Last May, the Bangko Sentral ng Pilipinas (BSP) issued guidelines requiring financial institutions to integrate sustainability principles, covering environmental and social risks, into their corporate operations and risk management strategies. These provide the basis for valuing climate resilience and low-carbon opportunities, including an urgent just transition from coal to RE. However, the BSP should establish more specific targets and timelines for sustainable financing by these institutions within the year.

These steps would allow the Philippines to exhibit stronger leadership at the regional level. Southeast Asia needs to double its investments by 2025 2030 relative to 2019 levels to achieve cleaner energy targets aligned with the Paris Agreement and SDG7 or "affordable and clean energy," per the International Energy Agency. Public spending on RE and energy efficiency also creates more than twice as many jobs as opposed to government financing of fossil fuels, and could help achieve lower electricity rates for consumers.

The demand side

Achieving a more sustainable and resilient energy sector also requires the adequate implementation of demand-side measures. Given the growing energy demand in the Philippines, the impacts of addressing this side of the energy issue is integral to achieving national development targets.

Current targets in the Nationally Determined Contributions (NDCs) are not enough to attain the 1.5-degree target, resulting instead in a projected warming of 2.9 to 3.4 degree Celsius by 2100. The Philippines's initial NDC targets are compatible with a 2 degree-warmer world, according to Climate Action Tracker.

Given its strategy of using the NDC as an investment strategy, the country's second NDC to be submitted by 2020 must include not only mitigation options for RE development, but also investments in promoting energy efficiency, access to cleaner cooking, and full electrification. In this regard, approaches for energy-related measures could be integrated with strategies for achieving SDG7, which lists the aforementioned demand-side areas as targets.

Emphasizing the co-benefits of demand-side measures would help generate more investments and public support in developing a more sustainable energy sector. Energy efficiency has been largely untapped in Southeast Asia, despite being considered as the "cheapest" fuel with economic and health benefits that are directly appealing to consumers and households.

The Philippines has taken steps to address the demand-side of energy resilience. Last year marked the enactment of RA 11285 or the Energy Efficiency and Conservation Act, which institutionalizes energy efficiency and conservation and grants incentives to applicable projects. National access to electricity was reported by the World Bank at nearly 95 percent in 2018, which is long embedded as a primary goal in national development plans.

Moving forward, implementing agencies must enhance existing and future strategies for addressing demand-side measures. Models for implementation such as transition to cleaner technologies for cooking, transportation, and buildings, off-grid electrification through RE, subsidies for transition to cleaner fuels, and promoting energy-efficient lifestyles must not only consider climate and environmental benefits, but also account for the welfare of Filipinos and their capacities.

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John Leo is the program manager of Living Laudato Si Philippines and Climate Action for Sustainability Initiative (Kasali). He has been a citizen journalist and feature writer since 2016. He was a delegate of the recently-concluded 2020 Virtual Asia Clean Energy Forum.


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