THE world is changing and so is the way we generate and consume energy.
With sustainable energy solutions on the rise, the industry has an opportunity to create a brighter future for the Philippines.
The changing landscape of the country's power industry, however, is facing unprecedented challenges from meeting the rising demand for energy to ensuring access and affordability for all.
Thus, partnering to achieve a secure and reliable supply of electricity for the country is what the government and private sectors and even the consumers are pushing for.
On March 20 and 21, key stakeholders in the Philippine electric power industry discussed specific issues and concerns in the country's electricity — through the Philippine Electric Power Industry Forum 2023.
The forum aims to strengthen collaboration and forge partnerships among industry participants in support of the objectives of the Electric Power Industry Reform Act (EPIRA), as well as to accelerate programs under the Philippine Development Plan 2023-2028.
Richard Nethercott, President and CEO of the Independent Electricity Market Operator of the Philippines, said the collaboration, coordination, and cooperation of the sectors will further boost the industry's effort to achieve a secure and reliable supply of electricity in the country.
"Our objective is to encourage meaningful dialogue and collaboration towards the achievement of the EPIRA objectives of a transparent, competitive, reliable energy market," Nethercott said.
Shift to renewable energy
According to the government, for the Philippines to become energy self-sufficient, it needs to utilize all existing resources it has through a combination of fossil fuels and renewable energy (RE). About 43 gigawatts of additional capacity will be required by 2040, and the clock is ticking.
Currently, in terms of energy mix, coal accounts for 47 percent of the country’s energy supply. Natural gas accounts for 22 percent, while renewables like hydro, geothermal, wind, and solar for 24 percent, and oil for 6 percent of the total 23 gigawatts of energy production.
Department of Energy (DOE) Undersecretary Rowena Cristina Guevara, during the forum, said as the global population continues to grow, along with climate change, the world rushes towards finding cleaner and more efficient alternative resources of energy.
"Global trends project an aggressive demand and accessibility for renewable energy in the next decade
Extensively harnessing renewable energy is critical for the future.
However, she said developing countries such as the Philippines are facing difficulties in the energy transition from traditional sources to renewable energy sources.
Guevara added that this transformation would require investments in new technologies focused on research and development, and responsible policymaking.
On top of that, the country's energy sector is market driven.
The government, in aspiration to its goals for a green source of electricity, the Energy Department issued Circular 2021-11-0036 on November 3, 2021 providing the guidelines for the Green Energy Auction Program (GEAP) in the country. This will allow additional market options for Renewable Energy (RE) Developers and will promote a competitive set of rates for RE supply in the country.
GEAP was undertaken to support and facilitate immediate and timely investments in new or additional renewable energy capacities to ensure the provision of adequate supply and competitive rates of electricity in the country.
With a second round of the GEAP scheduled for June 2023 for capacity coming online in 2024, DOE hopes to have 11,160 megawatts (MW) of renewable energy available in the coming year.
The GEAP aims to accelerate investments in new or additional renewable energy capacities to ensure the provision of adequate supply and competitive rates of electricity in the country.
“Compared to the first auction or GEA-1 last year, we are more aggressive this year and we are looking for RE developers who have ready capacity by next year,” Guevara said.
According to Guevara, the initial GEA held in 2022 yielded an additional volume of roughly 2,000 MW for the country’s RE supply.
The official said the agency has proposed installation targets of 3,590 MW this year, 3,630 MW in 2025, and 4,390 MW in 2026.
Of the 3,590 MW installation targets for next year, 2,400 MW is for the Luzon grid, 860 MW for Visayas, and 330 Mw for Mindanao.
These will involve RE resources, including ground-mounted solar, roof-mounted solar, onshore wind, and biomass.
The DOE targets to hold the GEA-2 in June this year following the success of the first GEA in 2022 with 2,000 MW of clean energy involved in the bidding.
By 2025, installation targets will be 2,325 MW for Luzon, 940 MW for Visayas, and 365 MW for Mindanao.
In 2026, these targets will be 2,990 MW RE installation in Luzon, 905 MW in Visayas, and 495 MW in Mindanao.
The DOE conducts the GEAP to provide an additional market for RE through competitive electronic bidding of RE capacities.
The program is also designed to attract more investments in the RE sector in the country.
Meanwhile, DOE’s GEAP-3 will involve geothermal and impounding hydro resources.
Guevarra said the agency is developing a specific auction policy for geothermal and impounding hydropower.
The DOE aims to conduct GEA-3 by the fourth quarter of 2023.
‘Not immediately’
Senator Sherwin "Win" Gatchalian", chairperson of energy, during the forum, said he is pushing for energy development in the country.
This after the country's crisis was affected following the Russia-Ukraine war in 2022.
“One thing the incident in Ukraine taught us is we need to get out of our addiction to imported oil and imported feedstock. Half of our electricity comes from Indonesia, because of coal. We import almost 100% of our coal from Indonesia,” Gatchalian added.
Gatchalian, who chaired the Senate Committee on Energy in the 17th and 18th Congress, is also pushing for Senate Bill No. 157 or the “Energy Transition Act” which aims to put the public and private sectors to achieve a net-zero goal in the country.
“This law aims to put everyone together and give a lot of power to the climate change commission to craft that road map and the net zero goal we’re looking at is around 2050 for the Philippines,” the senator said.
But as the world gears towards 100 percent RE, the Senator admitted that not a single country in the world has totally let go of its dependence on non-renewable energy sources such as fossil fuels like coal, petroleum, and natural gas.
"Not immediately. No country in the world has eliminated fossil fuels. One way or another. It's a transition," Gatchalian said.
He added the country might need liquefied natural gas (LNG) for the next five to 10 years, depending on the situation.
"We need to view net zero as a transition. It will not happen overnight," the senator said.
Federation of Philippine Industries chairman Jesus Arranza, meanwhile, said that the push for total renewable energy, which is being pushed by United Nations Sustainable Development to developing countries, is unjustifiable.
Arranza explained that first-world countries like the United States, China, and Russia, in the first place, emit a large volume of carbon emissions.
“We will not use these resources so that we will be left behind in our modernization? Dapat mag-isip-isip tayo,” he said.
As for the country to totally adapt to all RE, he said this should be decided “as a country.”
“If we decide to adapt, we should prepare for it. Whether we like it or not, energy will be a necessity. Everything will be energy dependent,” Nethercott said.
Whatever source is viable, he said that there will always be risk regardless. RGL