Notes for Secretary Cusi on the Philippine Energy Plan
AT THE FORUM to update the Philippine Energy Plan (PEP), DoE Undersecretary Jesus Posadas conceded that the plan is just a set of scenarios. “Just” does not do justice to the effort, however, because dreams do have binding constraints, and dreaming requires a lot of energy.
Projections on the power market have to have firm basis in economic and population growth, technology cost trajectories, and likely regulatory innovations.
Our first concern on the updated PEP is the projected power capacity and energy mix. The plan calls for a 30-30-10 electricity mix for renewables, natural gas, and coal. Where did the 30% renewables target come from?
The Renewable Energy Act of 2008 listed the following policies: 1) Feed-in-tariff system (FiT); 2) Renewable portfolio standard; 3) Green energy option; and 4) Net metering.
Of the four measures, only FiT and net metering have been implemented. FiT suffered delays after birth pains including non-transparent process and overshot targets, especially for solar and wind. No solutions have yet been offered to resolve the tariff issue owing to the overshoot in capacity eligible for FiT, and the transmission problem in Negros. Biomass and run-of-river hydro have been undersubscribed because of regulatory and tariff issues.
In 2010, we raised these issues with then DoE Secretary Almendras. How were the variable renewable energy targets set? The issue with the current DoE Secretary Cusi is, how are you setting targets?
We support Secretary Cusi’s thinking that the next round of FiT allocations for wind and solar be undertaken through auctions via free open system and with a series of tenders. But biomass and run-of-river hydro will not survive this process because of large pre-development costs.
Now let’s take a look at how Philippine energy policy affects our commitment to the Paris Agreement. Some institutions say that mitigation measures for our power sector cannot be undertaken without external support. However, a study done for the Climate Change Commission lists mitigation measures that have zero to negative incremental costs. And this is what planners need to prioritize.
The Philippines succeeded in getting China to respond positively to vulnerable countries’ call to ensure economic development and climate protection. In a historic first, during the CVF meeting in COP22, Mr. Xie Zhenhua, China’s Special Representative of Climate Change, affirmed that climate action to keep warming below 1.50˚C will pump economies.
China officially stated to CVF that “we want you to know China will be a strong partner in helping to develop the right strategies that make your economies more resilient and which can help develop low-carbon strategies.”
China’s public statement of support is important for the Philippines because of its strong commitment on technology and financial support for the necessary infrastructure upgrades we desperately need to build resilience such as electricity grid modernization, low-emission transport, and access to urban services.
Despite the US election outcome, Australia, Pakistan, and Italy moved forward and ratified the Paris Agreement. China and Saudi Arabia have publicly vowed to adhere to the Paris Agreement.
The climate is changing too rapidly and policy is almost always left behind, unless we have visionary leadership. China is the world’s largest investor in renewable energy and will have a big role to play in the Philippines.
Secretary Cusi, the ball is in your court. It’s time for more due diligence and for you to lead the charge so our people survive and thrive.
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