Decarbonizing the Philippine power sector

Can the Philippines decarbonize its power sector? That will be painful for our energy-intensive industries and require us to abandon our fossil-fuel-dependent lifestyles. But would this be beneficial for the country in the long run?

Skeptics might argue that a major policy change would stifle economic growth and prevent efforts to lift millions of Filipinos out of poverty. The unspoken assumption is that economic growth leads to prosperity for all, and that link is straightforward.

But survey after survey has shown that poverty figures remain elevated. Although on a downward trend, self-rated poverty among Filipino families has fluctuated between 55 percent in 1983 and 46 percent in March 2024 (with 30 percent on the borderline), according to the Social Weather Stations. Some 33 percent of the families also considered themselves food-poor last March.

Decarbonization is the pathway to achieve net zero emissions by 2050. This means that all emissions of heat-trapping greenhouse gases (GHGs) are counterbalanced by the reduction of fossil fuel use in equal amounts. The “zero-carbon” renewable sources include wind, solar, biomass, hydropower, and geothermal.

But does this mean that our power sector should cease using fossil fuels such as oil, coal, and natural gas that are warming up our planet? If so, how can we provide electricity to industries, offices, and homes without using nonrenewable energy sources? Is this action even feasible, given that our manufacturing sector, energy infrastructure, and transport system largely run on fossil fuels?

The answers to these questions have come from an unlikely source. Climate Analytics published a study done by Jonas Hörsch, Thomas Houlie, Lara Welder, Nandini Das, and Firza Riany on Nov. 15, 2023. These climate, energy, and data analysts did the hard work for us by studying the feasibility of weaning the Philippines from its dependence on fossil fuels, which are greenhouse gases that trap heat in the atmosphere and are therefore responsible for climate change.

Most detailed modeling scenario. The title of the study itself speaks volumes about the authors’ confidence in a decarbonized power sector: “A 1.5 degrees Celsius future is possible: getting fossil fuels out of the Philippine power sector.” (Link to the study can be found at https://tinyurl.com/y5ytsv2d). The study is the “most detailed 1.5 degrees Celsius scenario modelling for the Philippine power sector to date,” exploring exactly what the government needs to do to fulfill its obligations to the Paris Agreement, which limits global warming to 1.5 degrees Celsius above pre-industrial levels.

Clearly, the Philippine power sector is not aligned with the goals of the Paris Agreement. The current emission reduction targets of the draft Philippine Energy Plan 2023 are way off the mark: “[I]ts renewable energy targets are too low and there are no plans to phase out fossil fuels,” the study points out.

The study suggests that a compatible emissions pathway can be accomplished by replacing fossil fuels with renewable energy. Concrete policy suggestions include an “urgent” phase-out of coal-fired power by 2035 and gas-fired generation by 2040.

“This report finds this is not only feasible but will benefit the economy and provide more than a million jobs by 2050,” the analysts confidently say, a statement that challenges our government’s draft energy plan for 2023-2050 that pledges to develop only 40 percent of renewable energy in the country’s energy mix by 2040.

The Philippine Nationally Determined Contribution, the action plan to reduce GHG emissions, pledges to even “peak” the country’s emissions by 2030 “in the context of accelerating the just transition of its sectors into a green economy.” In short, expect more imported oil and coal to fuel our power sector for the next decades. In 2022, the energy mix in the country is made up of coal (31 percent), natural gas (4.2 percent), renewable energy (32.7 percent), and oil-based solutions (32.2 percent).

To achieve the decarbonization targets and 1.5 degrees Celsius pathways for combatting climate change, the analysts call for a rapid phase-out of fossil fuels and a scaling-up of renewable energy sources in the Philippines to near 100 percent.

Other key findings of the study: The Philippines has enough cost-effective renewable sources to both replace fossil fuels in the power sector and meet future energy demands (1,200 gigawatts); shifting toward a 1.5 degrees Celsius pathway would reduce electricity costs, but planning for infrastructure development with international financing is crucial; a 1.5 degrees Celsius emissions pathway will enable the Philippines greater self-sufficiency by reducing dependency on imported energy; and phasing out coal and replacing with renewables in the Philippines will generate jobs.

“It is also clear the Philippines’ power sector can attain a 1.5 degrees Celsius compatible emissions pathway without resorting to false solutions like retrofitting the coal fleet for green hydrogen, carbon capture and storage, or building new nuclear power capacity,” the analysts say.

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