Quezon City – The pursuit of the energy sector targets under the Philippines’ Nationally Determined Contribution (NDC) should result in improved energy security and reliability, energy access, and affordability of energy products and services.

This was emphasized by the Department of Energy (DOE) during the 13th episode of The Climate Reality Project Philippines’ Klimatotohanan series entitled “Trickling the Power Down Across the Regions: How to Make the Renewable Energy Transition Equitable.” 

The NDC refers to the document submitted by countries to the United Nations Framework Convention on Climate Change that embodies their respective efforts to reduce national emissions in line with the Paris Agreement.

According to Ms. Hershey Dela Cruz, Senior Science Research Specialist at the DOE, the energy sector target under the Philippines’ first NDC is to reduce total greenhouse gas emissions by 2.8. percent from 2020 to 2030 and 12.3 percent by 2020 to 2040.

“It will only be 2.8 percent by 2030 because the gestation period for renewable energy projects is long. Moreover, it’s because there are still committed fossil-based projects up to 2025 in the pipeline,” Dela Cruz said. “DOE cannot just remove them in the mix because significant investments have already been made for these projects,” she added.

In 2020, the  DOE has issued a moratorium on new greenfield coal power, effectively scratching 10,700 megawatts of coal projects in the energy pipeline. The moratorium does not cover committed coal projects that are at risk of being stranded assets.

Current energy policies in the Philippines enable utilities to pass on the costs of stranded coal assets to consumers. Because of this, experts have repeatedly called for the Energy Regulatory Commission to require a carve-out provision in power supply agreements for all fossil fuel projects. This clause will protect Filipino consumers from coal risk by allowing distribution utilities to buy less power from coal-fired generators, effectively exempting them from the consequences of coal-plant overbuild.

Philippine Energy Plan 2018-2040

Dela Cruz said that the energy sector’s NDC targets are based on the Clean Energy Scenario (CES) of the 2019-2040 Philippine Energy Plan (PEP), which she said aims to increase the production of clean and indigenous sources of energy to meet the growing economic development of the country.

However, it must be noted that the CES under the PEP still includes proposed significant portions of coal and oil in its energy mix. 

“The CES builds on the business-as-usual scenario with additional programs on alternative transport, renewable energy, natural gas use in other sectors, enhanced energy efficiency, and highly-efficient and emerging technologies,” Dela Cruz explained. “In order to fully transform into CES, we have to implement 45,000 MW of additional renewable energy capacity,” she added.

Barriers to renewable energy development

Dela Cruz noted that the primary barrier to rapid renewable energy development in the country is investments, noting that renewable energy projects are capital-intensive systems. 

To address this challenge, Dela Cruz said the DOE is working with the Department of Finance and Climate Change Commission to access international finance mechanisms under the Paris Agreement. She also cited DOE’s recent policy allowing full foreign ownership of  large-scale geothermal projects—which should attract more foreign investors.

Aside from investments, Director Renante Sevilla of the DOE Luzon Field Office, noted that lack of awareness among local government units (LGUs) is also a barrier. “This is why we advocated for the LGU Energy Code. We are pursuing convergence and collaboration to ensure a whole-of-government and whole-of-society approach to energy development,” he said.

This was supported by Ms. Lourdes S. Arciaga of the DOE Visayas Field Office, who said that the LGU Energy Code, which was signed early this year, should streamline the process of issuing permits for renewable energy projects. 

A unique challenge in Mindanao, according to Engr. Rolando J. Fara-on, of the DOE Mindanao Field Office, is the peace and order issue in the region. “It has been a dilemma for renewable energy developers. They had to apply force majeure to the DOE because they cannot undertake their studies and activities, especially for site-specific projects such as hydro and geothermal,” he explained.