Renewables, grid investments key to PH energy security

HEEDING THE EXPERTS The recent Inquirer ESG roundtable at Work.able Robinsons Summit Center, Makati City, featured (from left) moderator lawyer Pedro “Pete” Maniego Jr., chair emeritus of the Energy Lawyers Association of the Philippines, with speakers and panelists Sharon Montaner, director of the market operations service at the Energy Regulatory Commission; professor Rowaldo “Wali” del Mundo, associate dean for public engagement of the UP Diliman College of Engineering; Suiee Suarez, vice president for corporate affairs of AboitizPower Corp.; and lawyer Jose Layug Jr., senior partner at Divina Lawand president of Developers of Renewable Energy for Advancement, Inc. —Photos by Paul John Taverb

MANILA, Philippines — The Philippines must accelerate investments in renewable energy, modernize power planning, and fast-track transmission projects to prevent recurring power shortages and reduce dependence on imported fuel, energy experts said.

Energy experts and industry stakeholders recently gathered at the Inquirer ESG event titled “The Energy Tightrope: Balancing Affordability, Security, and Sustainability in a Time of Global Disruption” to examine how escalating geopolitical tensions, particularly in the Middle East, are reshaping global energy markets.

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Lawyer Jose Layug Jr., president of Developers of Renewable Energy for Advancement, Inc., said the country’s recent experience with surging oil prices highlights the need to adopt cleaner and more sustainable energy sources.

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He also encouraged Filipinos to consider switching to electric vehicles (EV), saying advances in EV technology have made them more affordable and practical.

Drawing from his own experience, Layug said he has driven an electric vehicle for two years and needed to buy gasoline only four times in one year.

READ: The opportunities and challenges in solar power generation

Beyond transportation, Layug warned that the Philippines continues to face insufficient electricity supply despite claims that available capacity remains adequate.

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“Every month of April, May, and June, yellow alert for the past four years. It’s been happening,” he said, adding that repeated shutdowns and derating of power plants show that more generation capacity is needed.

“We have to also pacify the investors that we have enough supply. We cannot afford those yellow alerts. They’ve been happening. We have to have a better storyline for the investors,” he said.

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“To build a power plant, you need 200 signatures. Please, government. Help them. Don’t make it longer for them,” he said.

Layug said the Philippines saw the largest expansion of renewable energy projects between 2016 and 2020, attributing the growth to the feed-in tariff (FIT) program.

“We saw that FIT works because it’s a fixed charge for 20 years and your power plant owners have peace in their hearts because there’s offtake for 20 years. And, therefore, the government did their green energy auction,” he said.

Layug noted that coal still accounts for about 62 percent of the country’s electricity generation, but “renewables are increasing. Of course, not fast enough. We’re hoping that they can.”

Instead of relying heavily on fuel subsidies during oil price spikes, Layug urged the government to prioritize investments in energy infrastructure.

“At the end of the day, you all know that subsidy does not promote efficiency,” he said. “We have to start thinking of spending not on subsidies but on infrastructure. Because I think it’s better spent if you do more infrastructure. It gives more investments. It entices more investments,” he added.

APPRECIATION Resource persons Maniego, Montaner, Del Mundo, Suarez, and Layug at the InquirerESG event with Dheza Paras, marketing director of the Philippine Daily Inquirer (left) and Cris Canaria, commercial director of the Philippine Daily Inquirer (right).

Reliable, affordable

Sharon Montaner, director of the market operations service of the Energy Regulatory Commission (ERC), said the challenge is no longer just accelerating the shift to cleaner energy, but ensuring the transition keeps electricity reliable, secure, and affordable for Filipinos.

“When fuel prices rise, electricity prices rise as well,” she said, noting that a weaker Philippine peso against the US dollar further increases the cost of imported fuel, which is reflected in consumers’ electricity bills.

“On the affordability side, during the Middle East crisis, the commission has delivered direct and measurable consumer relief through targeted intervention,” she said.

The ERC implemented staggered bill collections, extended the suspension of Green Energy Auction Allowance collections, accelerated over P21 billion in consumer refunds, and strengthened subsidies for low-income households.

To strengthen energy security, the ERC implemented market stabilization measures, expedited approvals for critical power projects, and enhanced oversight of distribution utilities.

It also advanced renewable energy through price ceilings for green energy auctions, expanded net metering, and adopted microgrid rules to improve electrification in underserved areas.

“While recent reforms have addressed immediate pressures, the underlying challenges of the Philippine power sector remain structural. Addressing these requires sustained, system-wide reforms rather than isolated policy adjustments,” she said.

Montaner said strengthening regulatory certainty is essential to reduce investment risks, noting that delays in project approvals, policy uncertainty, and inefficient processes drive up the cost of developing energy infrastructure.

The country’s shift to renewable energy will require investments in transmission networks, energy storage, and flexible grid systems to manage the variable output of solar and wind power while ensuring a stable and reliable electricity supply, she added.

Storage boost

Suiee Suarez, vice president for corporate affairs of AboitizPower, said that while expanding renewable energy is crucial to reducing dependence on imported fossil fuels, variable renewable sources such as solar and wind require a “massive boost in energy capacity, reserves, and storage.”

“In that regard, energy storage technologies like pump hydro and battery energy storage systems are critical,” he said.

Suarez said energy storage systems serve as crucial backup power by storing excess electricity and supplying it when demand rises, helping balance the grid, regulate voltage and frequency, maintain reliability, and reduce the risk of blackouts.

“An example of energy storage of significant size and scale are the Kalayaan Pump Storage Units of the 789-megawatt Caliraya-Botocan-Kalayaan or the CBK Hydroelectric Power Plant Complex,” he said.

“Another advantage of pump hydro is its good round-trip efficiency, as it retains more energy after a full round-trip cycle of charging and recharging, compared to other forms of storage,” he said.

Suarez said demand-side management and simple conservation measures can help ease pressure on the power grid and reduce electricity costs.

He cited simple conservation measures such as setting air conditioners to 24 degrees Celsius, unplugging unused electronic devices, and maximizing natural lighting.

Beyond conservation, Suarez encouraged middle- and high-income households to install rooftop solar panels to reduce their dependence on the grid.

“This is all the more reinforces why our collective habits, behaviors, and needs are important, if not more so determining the health of our power system, regardless if it’s a crisis or not. As such, we all need to be energy inquirers,” he said.

‘Good start’

Rowaldo “Prof Wali” del Mundo, associate dean for public engagement of the UP Diliman College of Engineering, said the government’s target of sourcing 50 percent of the country’s electricity from renewable energy by 2040 is a “good start.”

However, he said both power generation and transmission infrastructure must be strengthened to build a resilient and reliable energy system.

“Looking at the performance of the power plants, because we have the infrastructure, the question is whether the system is adequate and secured given our infrastructure,” he said.

He stressed the importance of ensuring sufficient ancillary services to address outages in power plants.

He also pointed out that the transmission operator has fallen behind on implementing projects under the Department of Energy (DOE)-approved transmission development plan.

“Out of 219 committed projects under the DOE approved transmission development plan, 79 were not implemented and 49 percent of completed as well as ongoing projects are delayed. If you look at the delays, the delays is up to nine years,” he said.

Attributing the delays to the COVID-19 pandemic is not a valid explanation, stressed Del Mundo, noting that many projects were already behind schedule before the pandemic.

“Even if the generating facilities are already there, the transmission was not there. And this is a big problem toward our energy transition plan because the timeline for the transmission project is 10 years, the lead time rather,” he said.

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“Will transmission infrastructure and its development be able to keep pace with renewable energy development? Transmission networks take five to 10 years to build, while power generation projects can be completed in as little as one year,” he said, adding that time-bound processes are needed to address this issue. /cb