Crisis seen adding urgency to RE transition

THE energy emergency highlights the need for the Philippines to accelerate its shift away from imported fossil fuels to renewable energy (RE), according to the Institute for Climate and Sustainable Cities (ICSC).

In an analysis, the think tank said heavy reliance on fossil fuels exposed the Philippines to global price volatility.

“The situation also puts the spotlight on the clear and massive opportunity to transform the energy system for our archipelago with locally-driven, fit-for-purpose solutions that optimize the abundance of renewable energy resources with available technology, building a more affordable, reliable, and secure power system for all Filipinos in the on-grid and off-grid areas,” the group said.

While coal is the leading fuel in power generation, the Philippines has set targets for the share of RE to 35% by 2030 and 50% by 2040.

Last week, President Ferdinand R. Marcos, Jr. issued an executive order declaring a state of national energy emergency due to global fuel supply disruptions and rising oil prices.

While the measures cited in the order are necessary to allow the use of government resources to stabilize supply, these are still not enough, ICSC said.

Since the impact of the crisis caused by the Persian Gulf crisis will be long-term, the ICSC said the Philippines must pursue structural reforms that reduce its vulnerability to global instability.

With the new entry of new capacity employing various renewable energy technologies, the Philippines is in a strong position to deploy local solutions and reduce reliance on imported fuel, the think tank said.

Since electricity price increases are fully and automatically passed on to consumers, the ICSC said that risks must be shared among the concerned stakeholders.

“Authorities should review pricing mechanisms to ensure that generators, suppliers, and utilities share in fuel price risks, that efficiency improvements are incentivized, and that consumers are not fully and immediately exposed to sudden price spikes,” it said.

“Consistent, fair and firm oversight of energy markets and enforcement of competition rules will ensure that consumers are adequately protected while the power system remains reliable,” the ICSC said.

To further ensure energy security, the think tank said the Philippines must also expand its strategic petroleum reserves, raise minimum oil inventory levels, and set clear protocols for energy conservation during emergencies.

The ICSC also cited the role of rooftop solar systems in lowering electricity bills and reducing demand on the grid. — Sheldeen Joy Talavera