MANILA, Philippines — Imagine a hot, sweaty day. The air is thick with humidity and the city that never sleeps is plunged into darkness.
Businesses are forced to close early, hospitals rely on backup generators, and families sweat through another night without fans or air conditioning. This isn't a scene from a horror film; it's the reality of perennial power outages across the Philippines, a glaring reminder of the country's urgent need for a more reliable and resilient energy sector.
While the Philippines strives for a sustainable energy future, the present demands a pragmatic approach.
Frequent power shortages and rising electricity costs paralyze businesses and disrupt daily life. The depletion of the Malampaya gas field, which currently supplies 19% of the country's energy, is threatening our energy security. Without a viable replacement, the nation risks even more widespread energy instability.
Adding to the consumer's burden are the yearly red and yellow alerts indicating a thin power supply unable to meet the rising demand. As of May 2024, peak electricity requirements are projected to reach 13,917 MW in Luzon, 2,834 MW in Visayas, and 2,584 MW in Mindanao.
Can the Philippines keep the lights on while transitioning to cleaner energy sources?
The baseload dilemma: Why renewables alone aren't enough (yet)
While solar and wind power hold immense promise, they can't currently serve as the backbone of the Philippine energy grid. Why? Because they are intermittent sources that are dependent on weather conditions. On cloudy days or calm days, their output drops significantly, especially during periods of peak demand.
This isn't to say we should abandon renewable energy—far from it! But we need to be realistic about its current limitations. Advancements in battery storage technology are underway, but they remain expensive and require significant investment.
A tale of two nations: Learning from our neighbors
Vietnam's approach to energy development provides a compelling example for the Philippines.
Facing similar challenges of rapid economic growth, Vietnam has strategically utilized coal and gas-fired power plants to provide baseload stability while simultaneously fostering the growth of renewable energy sources. This strategy has led to significant progress, with renewables now accounting for 42% of Vietnam's electricity generation in 2023, including a 13% contribution from solar and wind power.
Indonesia, also challenged with rising energy demands, offers a compelling example of harnessing geothermal power.
With abundant volcanic activity similar to the Philippines', Indonesia has successfully integrated geothermal energy as a reliable and renewable baseload source. Given the Philippines' even greater geothermal potential, tapping into this resource could transform the country's energy landscape.
Learning from our neighbors, we see that addressing transmission grid challenges and ensuring energy reliability are crucial to effectively integrating renewable energy sources.
A practical path forward: Strengthening the foundation
To secure a brighter energy future, the Philippines needs a multi-pronged approach:
Embracing all technologies for Baseload Power: It's a simple equation—more people need more power.
As the Philippine population continues to grow, so does the electricity demand. We must encourage constructing more power plants, regardless of the specific technology to keep pace. Whether it's coal, natural gas, geothermal, biomass or even nuclear.
Increasing our baseload capacity is crucial to meeting the needs of our growing nation. This means streamlining the permitting process, creating clear and stable regulations, and fostering a pro-investment environment that attracts domestic and foreign capital.
But building more power plants isn't just about quantity, it's also about competition. Remember when Smart and Globe were the only players in town? Prices were high and choices were limited. But then came Sun Cellular, Red Mobile and Bayantel, shaking things up with innovative offerings like unlimited text and call promos. Competition forced everyone to improve and consumers reaped the benefits.
Similarly, the same principle applies to power generation. More power plants mean more competition, leading to lower prices and better consumer service.
Invest in the grid infrastructure
The Philippines needs a power grid that can handle the increasing flow of electricity.
The aging infrastructure owned by the National Grid Corporation of the Philippines (NGCP) is causing power losses and outages. Upgrading transmission lines is crucial, and the NGCP needs to step up. The Department of Energy (DOE) and Energy Regulatory Commission (ERC) must hold the NGCP accountable for its 27 delayed projects.
While the ERC slapped the NGCP with a P12.3 million fine last November 26th, one has to wonder if P12.3 million is enough to get their attention; perhaps a "B" for billion would be more persuasive. Speaking of "B's," the ERC's decision to cap NGCP's allowable annual revenue at P36.7 billion, significantly less than the P51.47 billion initially granted in March 2022, raises some eyebrows.
Does this send a strong message from the ERC, or are consumers shortchanged? Continuously upgrading the grid infrastructure is essential, and it's time for both the NGCP and the ERC to prioritize the needs of the Filipino people over profits and bureaucratic maneuvering.
Empowering consumers in the energy sector
Consumers play a crucial role in shaping the energy landscape. Energy regulators, ERC and DOE must institutionalize consumer participation to ensure transparency and protect consumer welfare.
Certifying consumer groups to represent public interests in rate-setting and policy-making will amplify their voices and foster accountability. This means active participation more than public consultation.
By establishing an independent consumer representation within the regulatory framework, we can promote transparency, fair market competition, and reasonable electricity rates. After all, shouldn't the people paying the bills have a say in how the energy sector is run?
Policy reforms: Updating EPIRA for the 21st Century
The Electric Power Industry Reform Act (EPIRA) of 2001 was a landmark piece of legislation, but it needs an update to reflect the current realities of the energy sector.
Policymakers need to continue making laws protecting consumers' welfare while encouraging more investment in the energy sector.
A Call for Collective Action: Imagine a Philippines powered by clean energy—abundant sunshine harnessed by solar panels, wind turbines spinning on our coastlines, and geothermal plants tapping into the earth's natural heat. This isn't a fantasy; it's a future we can build, but it requires a strategic and balanced approach.
With energy costs soaring and blackouts disrupting daily life, the Philippines can't afford to wait. We need solutions now, which means embracing all viable technologies while paving the way for a cleaner future.
Policymakers must prioritize grid infrastructure upgrades and create a stable energy environment that encourages renewable and baseload power investment.
Energy stakeholders must commit to continuous upgrades, innovation and prioritizing consumer welfare over profits.
As consumers, we also have a role to play by conserving energy, actively participating in energy public consultations, responsibly exercising our Consumer Rights and Obligations under the Magna Carta for Residential Electricity Consumers and demanding accountability from our energy providers.
Let's work together to build an energy future where the lights stay on, businesses thrive, and every Filipino can access affordable, reliable and sustainable power.
The time for action is now.
References
- Department of Energy (DOE) Philippines. (n.d.). Consumer connect: Consumer rights & obligations. Retrieved December 11, 2024, from https://doe.gov.ph/consumer-connect/consumer-rights-obligations
- GMA News Online. (2023, October 27). ERC slaps P12.3-M fine vs. NGCP over 27 delayed projects. Retrieved from https://www.gmanetwork.com/news/money/companies/928179/erc-slaps-p12-3-m-fine-vs-ngcp-over-27-delayed-projects/story/
- International Renewable Energy Agency (IRENA). (2020). Renewable energy market analysis: Southeast Asia 2020. Retrieved from https://www.irena.org/
- Maitem, K. (2023, November 8). ERC caps NGCP allowable revenue at P36.7B annually, well below amount sought by grid. BusinessWorld. Retrieved from https://www.bworldonline.com/economy/2023/11/08/556462/erc-caps-ngcp-allowable-revenue-at-p36-7b-annually-well-below-amount-sought-by-grid/
- Ministry of New and Renewable Energy (MNRE), Government of India. (2019). National solar mission: Achievements and challenges. Retrieved from https://mnre.gov.in/
- World Bank. (2022). Indonesia energy transition strategy: From fossil fuels to renewable energy. Retrieved from https://www.worldbank.org/
- Institute for Climate and Sustainable Cities (ICSC). (2024). 2024 Philippine power outlook full report. Retrieved from https://icsc.ngo/wp-content/uploads/2024/04/2024_PowerOutlook_FullReport.pdf
- International Energy Agency (IEA). (2023). Vietnam: Energy profile. Retrieved from https://www.iea.org/countries/viet-nam
About the author: Nic Satur Jr. is a dedicated energy advocate committed to driving positive change in the Philippine energy sector by promoting consumer rights, energy literacy, and sustainable solutions to the nation’s energy challenges.
Editor’s Note: This article is published by the Advertising Content Team that is independent from our Editorial Newsroom.