Making progress towards a Philippines powered by secured, reliable supply

By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor and Chelsey Keith P. Ignacio, Special Features and Content Senior Writer

The Philippines is in the midst of an energy crisis unlike any before. The Malampaya natural gas fields, which currently supplies 30% of Luzon’s energy consumptio.n, will run out next year. With the country’s ever-increasing population, one of the highest economic growth rates in the region, and massive government efforts towards building additional infrastructure to support that growth, the energy sector needs to take action quickly, or else have it all crashing down.

According to the government, for the Philippines to become energy self-sufficient, it needs to utilize all existing resources it has through a combination of fossil fuels and renewable energy (RE). About 43 gigawatts of additional capacity will be required by 2040, and the clock is ticking.

This is one of the main issues discussed at the recently concluded Philippine Electric Power Industry Forum 2023, held at the Diamond Hotel Manila, organized by the Independent Electricity Market Operator of the Philippines (IEMOP), in coordination with the Department of Energy (DoE) and Energy Regulatory Commission (ERC).

Currently, in terms of energy mix, coal accounts for 47% of the country’s energy supply. Natural gas accounts for 22%, while renewables like hydro, geothermal, wind, and solar for 24%, and oil for 6% of the total 23 gigawatts of energy production.

With a second round of the Green Energy Auction Program (GEAP) scheduled for June for capacity coming online in 2024, the DoE hopes to have 11,160 megawatts (MW) of renewable energy available in the coming year.

The GEAP aims to accelerate investments in new or additional renewable energy capacities to ensure the provision of adequate supply and competitive rates of electricity in the country.

“Compared to the first auction or GEA-1 last year, we are more aggressive this year and we are looking for RE developers who have ready capacity by next year,” DoE Undersecretary Rowena Cristina L. Guevara said.

According to Ms. Guevara, the initial GEA held in 2022 yielded an additional volume of roughly 2,000 MW for the country’s RE supply.

The goal is to have 3,590 MW operational by the end of 2024, out of a total of 11,610 MW. There are 2,400 MW on Luzon, 860 MW on Visayas, and 330 MW on Mindanao. Solar panels installed on the ground or on a building’s roof, onshore wind turbines, and biofuels all fall under this category of renewable energy.

Ms. Guevara has stated that by 2025, the target installation capacity is 3,630 MW, with 2,325 MW on Luzon, 940 MW on the Visayas, and 365 MW on Mindanao. By 2026, the target installation is 4,390 MW, with 2,990 MW on Luzon, 905 MW in the Visayas, and 495 MW on Mindanao.

Ms. Guevara also mentioned that third round of auctions, the GEA-3 for geothermal and impounding hydropower, would be conducted by the DoE in the fourth quarter of 2023.

“In preparation for this, we are collaborating with development partners for technical assistance, specifically in developing auction guidelines and a policy on settlement and payment through WESM (Wholesale Electricity Spot Market),” she said.

Mary Grace Gabis, senior science research specialist at the DoE, mentioned that the GEAP, alongside other programs such as the Net Metering program, which allows consumers to install an on-site RE facility not exceeding 100 kilowatts in capacity so they can generate electricity for their own use, are currently “the most effective policies so far in the energy sector for the Philippines” in terms of addressing the supply and demand side of renewable energy.

“More investors will hopefully lead to more competition in the market and more capacity available for supply,” ERC Chairperson and CEO Atty. Monalisa C. Dimalanta had told ����ý. “More capacity will also mean less instances of thin margins and less price volatility especially if new capacity comes from indigenous and/or renewable energy sources.”

Opportunities in electric power

Electric power industry players and the government discussed updates and opportunities during the second day of the forum.

Luisa I. Hernandez, acting department manager for corporate planning at National Electrification Administration (NEA), talked about the importance of and initiatives to power rural areas with the topic “Energy Access – Rural Electrification”.

“The Rural Electrification Program is about sustainable development through rural electrification,” she said. “It is not just about the construction of lines reaching the last household in the ECs (electric cooperatives) franchise area. It’s about social and economic development in the countryside; it’s about sustainable rural development.”

NEA’s plans and programs are Sitio/Barangay Electrification Program, Strategized Household Electrification Program, and Solar Schools Electrification Program, among others.

Senator Sherwin “Win” Gatchalian, who serves as the vice-chairperson of the Senate Committee on Energy, gave a keynote focused on “Legislative Agenda to Promote Energy Security”.

Mr. Gatchalian shared some Senate Bills (S.B.) that he filed, such as the S.B. No. 157 or the Energy Transition Act, which would involve the creation of an Energy Transition Plan to attain net zero by 2050. He also mentioned the S.B. No. 152 or the Midstream Natural Gas Industry Development Act; the S.B. No. 151 or the Waste-to-Energy Act; and S.B. No. 485, which seeks the removal of the 100-kilowatt (kW) cap to let more end-users participate in the net-metering program.

Manila Electric Company (Meralco) First Vice-President and Chief Commercial Officer Ferdinand O. Geluz followed by giving details about the Net Metering Program, including the application process and requirements.

“Through net metering, it allows consumers to become prosumers. So, they produce as well as they consume,” Mr. Geluz said.

He also shared some net metering statistics from Meralco, showing that they have a total of 6,665 activated net metering customers and a total installed capacity of 40,075 kWp (kilowatt-peak), as of end-December 2022.

PEPIF also highlighted the “Challenges and Opportunities in the Retail Electricity Supply Sector” with a presentation by Retail Electricity Supplier Association President Raymond Carl R. Roseus, stating that the participation has grown from around 29% of the contestable market in 2013 to 60% at present.

Mr. Roseus then joined in the panel discussion on the same topic with Atty. Chiara Angela LB Blanco, division chief of ERC’s Contestable Market Division, and Katrina A. Garcia-Amuyot, manager of IEMOP’s Registration and Stakeholders Services Division.

In his presentation in a panel discussion on “Missionary Electrification: Ensuring Reliable, Adequate, and Quality Services to Off-Grid Areas,” Rommel U. Mamangun, department manager of corporate planning and corporate affairs group of the National Power Corporation (NPC), showcased the policies and programs on missionary electrification from 2001 until 2022, as well as NPC’s Missionary Electrification Plan.

Joining Mr. Mamangun in the panel discussion were Irma Exconde, Director IV of the DoE’s Electric Power Industry Management Bureau (EPIMB), and Carlos Rheal B. Cervantes, CFO and COO of PowerSource Philippines, Inc.

Consumers’ perspectives on issues concerning electricity were then delved into by Jesus L. Arranza, chairman of the Federation of Philippine Industries. One of the points that Mr. Arranza noted was that players in the power industry lack in enlightening the people, especially when it comes to power issues.

“We are explaining these in the language that we know, [which involves] highfalutin words. But we should turn such explanations to a level that can be better understood by more people,” he said in Filipino.

“The consumers are the lifeblood of the electric power sector. We must ensure they are protected when we endeavor to enhance efficiency for more transparency, accountability, and competitiveness in the power market,” Congresswoman Ma. Rene Ann Lourdes G. Matibag, a member of the House of Representatives Committee on Energy, also said in a recorded video of her keynote message during the forum.

Updates about the WESM Governance were then presented by Philippine Electricity Market Corporation (PEMC) President Atty. Elvin Hayes E. Nidea, followed by Market Operations and Developments Update from IEMOP COO Robinson P. Descanzo.

As of March 3, the total WESM registered capacities were at 26,396 MW, with Luzon accounting for the 18,448 MW, 3,628 MW in Visayas, and 4,321 MW in Mindanao; while coal remaining to be dominant across the three regions.