Quezon City—Modernizing the grid to integrate variable renewable energy systems enables a path where the Philippines can achieve energy security, foster economic development, and support climate goals.

On November 13, Climate Reality Philippines participated in Stratbase ADR Institute’s roundtable discussion entitled Powering the Future: Accelerating Grid Modernization for Energy Security and Sustainable Development at the Asian Institute of Management, Makati City. The discussion revolved around ways to increase the share of renewables in the country’s power generation mix and advance renewable energy to support national development targets. 

Here are eight (8) key takeaways that the government should consider in navigating pathways towards a more resilient and sustainable energy system.

1. Augment endeavors to implement existing renewable energy mechanisms. 

Renewable Portfolio Standards (RPS), Feed-in-Tariff System, Renewable Energy Market (REM), Green Energy Option Program (GEOP), and Net-Metering are among the renewable energy mechanisms provided in the Renewable Energy Act of 2008. 

The Branch expends efforts, specifically, to promote the implementation of GEOP with its realized potential to contribute to increasing the share of renewable energy in the power generation mix. Assistant Secretary Mylene Capongcol of the Department of Energy (DOE), recognized GEOP as a market development mechanism to attract major renewable energy investments in the country. 

A decade ago, renewable energy peaked at 34% but declined to 29% over the years despite the enactment of the Renewable Energy Act. The Philippines, with its abundant indigenous resources of renewables, has a promising direction in achieving its renewable energy targets only if the country maximizes the full potential of its renewable energy mechanisms already in place. 

2. Optimize renewable energy sources in the country. 

The Philippines, in its National Renewable Energy Program (NREP) 2020-2040, envisions scaling up the share of renewable energy in the power generation mix to 35% by 2030 and 50% by 2040. The country also commits to reducing its greenhouse gas emissions by 75% in the Philippine Nationally Determined Contribution (NDC). 

Prof. Victor Andres Manhit, the President of Stratbase ADR Institute, acknowledged that renewable energy addresses the struggles of developing countries in adapting to the rapidly changing climate and attaining energy security. “Creating innovative technologies and increasing the use of renewable energy sources reduces environmental footprint and creates a more digitally-enabled, sustainable, and green economy in support of the circular economy,” he explained. 

The Philippines is home to an abundance of renewables. Energy Undersecretary Sharon Garin reported that the country has a potential capacity of 178 GW from offshore wind power plants alone. As of June 2023, 1,087 renewable energy projects were awarded amounting to a total potential capacity of 113.564 GW. 

Key energy players, such as the DOE and the Energy Regulatory Commission, should stay committed in creating enabling mechanisms towards a clean energy future.

3. Depart from expensive and dirty energy sources, such as fossil fuels and nuclear.

“We have more coal in the system. Coal is no longer cheap. You and I experienced expensive electricity rates last year because coal reached as high as 400 dollars per metric ton in the new castle price index. And because we have more coal, you and I paid more,” Atty. Jose Layug, Jr., the President of Developers of Renewable Energy for the AdvanceMent, Inc., said.

The vulnerability of fossil fuels to global market price volatility and expensive importation costs trigger a spike in the electricity rates; thereby, putting much weight on Filipino households and businesses. 

Fossil gas and nuclear energy entered the radar of policymakers which detracts focus from renewable energy. Fossil or natural gas belongs to a variety of fossil fuels and is therefore not considered renewable. It concurs similar expensive marginal costs as coal and will also likely end up as a stranded asset. Additionally, nuclear energy entails expensive costs and a complex waste management system. 

“Why should we look at a more expensive source of energy and not indigenous to the country? We import our fossil fuels while renewable energy is here in the Philippines; we can tap it easily. It will lead to a more reliable and secure Philippine energy system if we go the path of renewable energy,” Atty. Pedro Maniego, Jr., the Senior Policy Advisor of the Institute for Climate and Sustainable Cities and Incoming Chairman and President of the Institute of Corporate Directors, argued.

4. Ease regulatory burdens surrounding renewable energy.

The government forwarded a strong case for advancing renewable energy across the country signaling foreign and local investors to set their feet in. However, regulatory burdens hinder some players from investing in renewable energy infrastructures.

“Generation plants need at least 104 permits and take as long as 1.5 years for the construction to start. There are also right-of-way problems in building transmission lines,” Dr. Majah-Leah Ravago, an Associate Professor from the Ateneo de Manila University, said. 

Over the years, the government created business-friendly mechanisms to invite more players in the field such as granting 100% foreign ownership to renewable energy projects and the energy virtual one-stop shop. The energy sector needs similar endeavors to encourage more renewable energy investors. 

5. Accelerate transmission capacity to level with renewable energy advancements. 

Atty. Layug raised the inadequacy of transmission lines to further integrate variable renewable energy. According to Usec. Garin, DOE will collaborate with the National Transmission Corporation or TransCo to develop a transmission expansion plan that will provide a roadmap for enhancing the country’s transmission system in the upcoming decades.

Moreover, the National Grid Corporation of the Philippines (NGCP) committed to invest PhP300 billion in grid improvements. “While NGCP’s profitability is crucial to its shareholders and the financial markets, a recalibration of its priorities toward greater public accountability and infrastructure investment is imperative,” Atty. Terry Ridon of ADR Institute remarked.

Transmission lines should be equipped to accommodate renewable energy advancements and ensure reliable delivery of electricity services to Filipino consumers.

6. Expand financing and de-risking of renewable energy projects. 

Despite the growing traction towards renewable energy, hesitancy from the private sector remains. Experts and groups should mobilize efforts to de-risk renewable energy projects. 

Multilateral development banks and other financial institutions should also start expanding financing assistance to renewable energy projects instead of fossil fuels. For instance, loan guarantees surrounding renewable energy projects or initiatives could be part of concessional financing.

7. Coordinate energy-related policies and actions among key stakeholders. 

The road towards a just energy transition demands a holistic course of action from all relevant stakeholders. 

“There needs to be a lot of coordination. Both government agencies and generations should work well with each other,” Atty. Layug said. Unified and targeted planning should frontload succeeding endeavors in implementing the Philippine energy agenda to minimize unforeseen risks.

8. Engage the grassroots in the energy conversation.

Energy insecurity and expensive power costs pose threats to the marginalized sector, which adds burden to their living conditions. 

Filipino consumers, who are disproportionately affected by the captive energy system, need to be included in the energy planning discourse. 

“It’s not about downloading information but also being empathetic by knowing what they need and their struggles. That’s how we know what are the best programs and policies we should roll out,” Atty. Karry Sison, the Co-Convenor of  Bantay Konsyumer, Kalsada, Kuryente, explained. 

The Philippines needs strategic, innovative, and responsive policies and interventions towards an energy transition that promotes sustainable energy and caters to the interests of all Filipinos.

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