By Ludwig O. Federigan – January 17, 2019
from The Manila Times
For today’s column, we collaborated with a guest writer — Earl Pagatpat, MBA. Pagatpat is a consultant for Frost and Sullivan assigned under the energy and environment unit that specializes in growth consulting, and custom market-competitive market research on advancements in smart buildings, renewable energy, and other key industry areas.
The Philippines has embarked on an unprecedented decision to enter into the golden age of infrastructure under the “Build, Build, Build” (BBB) Program that seeks to accelerate infrastructure
spending and develop industries that will yield robust growth, create jobs, and improve the lives of Filipinos. Public spending on infrastructure projects is targeted at P8 to 9 trillion from 2017 to 2022 (Sara Mae Mawis, 2018). And one of the key projects under the BBB Program is four energy facilities.
The BBB Program aims to surpass its predecessors since the inception of the Philippine independence from the Americans, and leave an indelible mark of success in the country’s history. This would lead to rapid urbanization and rural electrification resulting in an increase in electricity demand, which then needs more credible sources of energy. Infrastructure such as in the domain of transportation system and highways won’t be effective, efficient and ultimately will not serve its utility without electricity.
The Department of Energy (DoE), mandated under Republic Act 7638, prepared the Philippine Energy Plan (PEP) 2017-2040 with the theme “Empowering Filipinos through Informed Choices by
Utilizing Safe, Secure, Sustainable and Resilient Energy.” It is a comprehensive and integrated plan that goes through the energy value chain from resource development to utilization, with preferential bias on environment-friendly, indigenous and low-cost sources of energy.
Anchored on the Ambisyon Natin 2040 and the BBB Program, the plan is guided by eight strategic energy directions, namely: ensuring energy security; expanding energy access; promoting a low carbon future; strengthening collaboration among all government agencies involved in energy; implementing, monitoring and integrating roadmaps and actions plans; advocating the passage of the department’s legislative agenda; strengthening consumer welfare and protection; and fostering stronger international relations and partnerships.
According to Energy Secretary Alfonso Cusi, the Philippines would need an additional 43,000 megawatts from 2016 until 2040 to support the flagship program of the incumbent administration of AmBisyon Natin 2040. In 2017, the total installed capacity was at 22,730 MW of which 90 percent of capacity is dependable.
As the country tries to flex its economic muscles to become one of the most significant economies in the Southeast Asian region and eventually in the world in due time, it faces several conundrums such as meeting the immediate demand to support its growing economy versus the time to build the infrastructure needed to meet that demand and the challenge, to manage both adequacy of long-term energy supply while ensuring its source has no severe environmental implications.
Regarding the first conundrum, power plants would on average take three to seven years to build, which is a significant time to already hamper the ambitions of the Philippines to move forward.
The country cannot afford such an energy gap in a long time. Hence, the reason to undeniably have a proxy to sustain its growth momentum. A good alternative to support this transition in addition to being an aid to support the increasing demand for energy is the use of renewable energy (RE).
RE possesses unique characteristics that make it a viable option for this scenario. It has a short construction lead time, low operating and maintenance cost, low technology risk, and is scalable.
The most favored source of energy is wind and solar due to their low construction lead time, only averaging one year for construction time for a utility-scale power plant that is a viable transitory source of energy.
Not all countries are blessed with such resources and the Philippines has been very fortunate to have access and the potential capability on biogas, solid biomass, geothermal, solar photovoltaic, onshore wind, and renewable hydropower. A ranking released by the International Renewable Energy Agency (Irena) showed that the Philippines ranked third in the global rankings in 2017 for geothermal energy in terms of installed capacity, one rank lower compared in 2016 when the country was ranked second to the United States. The country’s renewable energy composition by installed capacity is largely coming from hydropower, which is at 51 percent, followed by geothermal at 27.2 percent, solar power at 12.5 percent, onshore wind at 6 percent, solid biomass at 3.2 percent, and biogas at 0.1 percent.
Based on the PEP 2017-2040, the overall objective for the renewable energy sector is to increase RE installed capacity to at least 20,000 MW by 2040.
The government of the Philippines looks to position itself to be beseemed for the 21st century in the domain of energy as it ushers in the age of renewable energy. This also increases the country’s bargaining power in geopolitics as it tries to become one of the market leaders in producing renewable energy leveraging on its vast sources.
In pursuit of our commitments to the Paris Agreement, renewable energy is a significant response to limit temperature increase to 1.5 degree Celsius (C) above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change. “Limiting global warming to 1.5 degree celsius would require rapid and far-reaching transitions in energy, land, urban and infrastructure [including transport and buildings], and industrial systems, and these systems transitions are unprecedented in terms of scale and imply deep emissions reductions in all sectors,” according to the latest landmark scientific report, the “Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming” of 1.5 C, released in October 2018.
However, the goal does not come with free lunch or a walk in the park, instead, huge challenges await and the need to ensure that stakeholders in this industry collaborate and seamless work together is paramount. Few actions are expected to be displayed such as review and implementation of a robust institutional capacity, assessment of existing grid infrastructures combined with initiatives to implement smart and off grids, and policy and regulatory related enhancements that eradicates volatility, uncertainty, complexity, and ambiguity to all its stakeholders. A review and updating of the National Renewable Energy Program would accelerate RE development and utilization.
The Philippines has long been outside the spotlight economically, but given the undergoing economic and regulatory reforms, the country shows no sign of losing its steam and stays to be committed in portraying to its neighboring countries, and to the world that the country is indeed a renewed Philippines and is starting to already heal its economic wound as an effort to eradicate the stigma of being the sick man of Asia.