ABOITIZ Power advocates for a balanced use of power resources, emphasizing the need for this approach in the short term as the country prepares its infrastructure for renewable energy.
“It is a reality we face, we do have an abundance of natural resources but we don’t have the infrastructure yet to be able to harness it,” said Ronaldo Ramos, chief operating officer of the AboitizPower Thermal Business Group, during the Cebu Business Months Summit on June 14, 2024.
Ramos cited the energy transition, aging power plants and lack of energy infrastructure as key challenges hindering the country’s immediate shift to renewable energy.
“It is for these reasons that we, in Aboitiz Power, are advocating a managed transition approach where we are looking at where we can we will build renewable energy (plants) but where it is needed, we will consider gas and coal,” Ramos said.
The Department of Energy aims for renewable energy to make up 35 percent of the national power generation mix by 2030 and has set an aspirational target of 50 percent by 2040.
“There are solutions. We are all looking at it. But these things take a bit of time. What we are advocating is we push hard for renewable energy but we balance the portfolio given how we are,” said Ramos, referring to the country’s rapid population and economic growth.
Ramos cited the fast-growing economy of Cebu as an example, noting that by 2028, the power demand of the island will outpace the available supply.
According to Ramos, investments in renewables are encouraging but at this point, the country can’t solely rely on these investments in the medium-term given the country’s robust growth.
He added that even the 200 megawatts (MW) Mindanao-Visayas Interconnection Project would become insufficient if the economies in the Visayas and Mindanao grow by five to six percent annually. Cebu grew 7.3 percent growth in 2023.
“It is not as simple as building more solar plants because it requires one hectare of land for every megawatt of energy. It’s not sustainable… To build more renewable plants, we need the right conditions to be present,” he said.
Aging power plants are another concern. According to Ramos, some power plants across the country were built in the 1990s and are now undergoing maintenance.
“As they age, there is a need for maintenance and with more maintenance comes less reliability,” he said.
In Cebu, the average age of power plants is 17 years old. Ramos warned that if not complemented, there could be potential challenges.
Power shortages in recent months were due to limited power supply caused by forced outages of some power plants while some were running on derated capacities, according to the National Grid Corp. of the Philippines.
To address immediate needs, Aboitiz Power is building a 173 MW solar plant in Negros and a third coal plant of Thermal Visayas Inc. in Toledo City, Cebu.
When asked for his opinion, Regan Rex King, overall chairperson of CBM 2024, agreed with Aboitiz Power’s stance. He noted that Cebu’s rapid progress makes it difficult for renewable energy to meet the projected demand in the medium term.
However, King emphasized that the transition to renewable energy should be considered a long-term goal.
“We need to think the box and be creative when making solutions. It has been done by a lot of countries, why can’t we?” he said.
In past interviews, entrepreneur Steven Yu, former president of the Mandaue Chamber of Commerce and Industry, said that using coal to augment Cebu’s rapidly dwindling baseload power capacity, largely due to aging plants, will ensure stable power for the island.
“While we are scaling up on our renewable energy generation capacity, this will help stabilize our power supply versus demand and avoid costly blackouts,” he said.
“We need to manage the transition much better given our unique circumstance… We cannot afford to switch on and switch off… We want to address the transition in a manner that benefits the Philippines not by the demands of the western countries,” said Ramos. / KOC