PH energy transition: Where to?

After hearing President Marcos Jr.’s first State of the Nation Address, most people are bound to think that we are on the road to expanding renewable energy (RE). On the contrary, what is apparent is the planned expansion of dangerous and climate crisis-inducing energy sources such as fossil gas and nuclear energy. While there were pronouncements calling for more RE, the actual marching orders were to speed up the approval of policies, favoring these two sources of energy. Unfortunately, these interventions are false solutions that will exacerbate the problem.

This development comes at the heels of a decade-long expansion of the use of coal. Based on data from the Department of Energy (DOE), the installed capacity of coal energy in 2011 was 4,917 megawatts (MW), which reached 11,689 MW in 2021. The expansion contributed to worsening air pollution in the Philippines, costing as much as 1.9 percent of the gross domestic product and 27,000 premature deaths annually. Moreover, the expanded use resulted in too much reliance on rigid base load energy plants, whose unscheduled maintenance intervals and breakdowns affected large areas. This explains the yellow and red alert status from the grid energy supply shortage experienced in 2020.

Like coal, fossil gas will not help in the DOE’s efforts to attain energy independence. Meanwhile, introducing nuclear energy will be deadly and costly for the Philippines. We have no experience dealing with the risks—even the bare minimum will be beyond the current capacity of the government and private sector in the country.

The economics are also unsound. Fossil gas and nuclear fuel are now far more expensive than renewable energy. Based on the report from Lazard in 2021, the levelized cost of energy (or LCOE, a method used to compute and compare energy generation costs) are as follows: utility scale solar ranges from $30-$41/MWh (megawatt hour); wind is at $26-$50/MWh, while gas and nuclear costs more than thrice as much, at $151-$196/MWh and $131-$204/MWh, respectively.

Coal and fossil gas prices are now so high that even energy generating companies—which have always been incapable of meeting the country’s energy needs—are asking to increase electricity rates. Recently, SMC Global Power said it lost almost P15 billion from 2021 to date, due to the high prices of fuel from their Ilijan fossil gas and Sual coal plants.

The company is now asking the Energy Regulating Commission for temporary relief by increasing consumer rates to cover its financial losses. Again, private companies are passing on the burden to consumers, who are already suffering from the combined weight of oil price hikes and food shortages.

Clearly, the Philippines’ coal expansion in the past decade has resulted in reliance on imported fuel, higher prices, unreliable energy sources, and, more importantly, environmental and health impacts. Fossil gas and nuclear energy plants will only serve to exacerbate these problems.

Yet, 26 gigawatts (GW) of fossil gas projects are still in the pipeline, with the government approving this week two new fossil gas terminals. Meanwhile, nuclear energy is being pushed in Congress with the obvious support of the administration.

Historically, when coal and other energy sources expand, the share of renewable energy shrinks. This is the case with our recent energy mix at the end of 2021. We now have a measly 28.9 percent share of RE compared to 32 percent in 2016. Adding insult to injury, the current ambition is to increase RE share to just 35 percent by 2030—a figure sorely lacking in ambition.

What is available and easily accessible within our shores are renewable energy sources. According to a study by the DOE and the US Agency for International Development, the Philippines is estimated to have around 808 GW of untapped renewable energy. Our current electricity peak demand is only 16 GW.

Renewable energy, which the President himself is proud to have utilized in his home province in Ilocos Norte, has proven itself more than capable of providing constant energy to the grid, without the risk of price volatility in the international market.

Newly appointed DOE Secretary Raphael Lotilla stated in his first press briefing that his department will “accelerate and expand the development of our indigenous energy resources.” Ironically, coal, fossil gas, and even uranium are primarily being imported.

Renewable energy is indigenous, competitive, can provide more than we need, and can have the least impact on our environment and climate.

On the other hand, as ordinary citizens, are we willing to accept the risks of higher prices, worsening climate impacts, and various uncertainties associated with fossil gas and nuclear energy, when we have a cheaper, reliable, and safer choice in renewables? For me, the answer is a resounding no.

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Khevin Yu is the energy transition campaigner of Greenpeace Philippines, who previously worked for the Philippine Movement for Climate Justice. He graduated from De La Salle-College of St. Benilde in 2008 with a degree in consular and diplomatic affairs.