It was a busy year for the energy industry.
In 2023, the government oversaw further development of not-so-clean energy sources such as natural gas and nuclear energy after opening the country up for investments in renewable energy in 2022.
An updated draft of the Philippine Energy Plan (PEP), released in September, showed the country may still rely on fossil fuel-fired power plants, even until 2050, or way beyond the suggested deadline of scientists to keep global temperatures below 1.5 degrees Celsius.
But before that, both chambers of Congress had passed natural gas-related bills.
In August, the House of Representatives overwhelmingly voted for the approval of House Bill 8456 or the Philippine Downstream Natural Gas Industry Development Act, which seeks to convert coal-fired power plants into natural-gas-fired power plants.
It also mandates distribution utilities to acquire a percentage of their supply from natural gas power plants regardless of the cost.
In the Senate, a similar bill is pending before the committee on energy. It was sponsored by the committee chair, Sen. Raffy Tulfo.
In November, the government signed the 123 Agreement with the US government, providing the legal framework for the development of nuclear energy in the country with American investors.
The Marcos Jr. administration has been advocating for nuclear energy alongside the development of nuclear energy. Clean energy advocates have expressed alarm over the administration’s interest in the technology.
“Nuclear energy adds a risk our country does not have to take,” Gerry Arances, executive director of the Center for Energy, Ecology, and Development (CEED), said in a statement.
The Department of Energy (DOE) is expected to release the final draft of PEP before the end of the year.
The talks at the 2023 United Nations Climate Change Conference or COP 28 in Dubai, however, could influence the final version of the energy plan.
In one of the talks during the conference, a DOE representative said the government was “encouraging” early voluntary decommissioning and repurposing of existing coal-fired power plants.
At the same time, the representative lauded the energy transition mechanism (ETM) employed by both the Asian Development Bank and ACEN (Ayala Corp. Energy).
ADB’s ETM, in particular, aims to use a financing scheme to incentivize the decommissioning of coal plants earlier in their lifespans and invest in renewable energy instead. It involves both public and private sectors.
A version of the scheme had been employed by ACEN when it decided to decommission the 270-megawatt South Luzon Thermal Energy Corp. (SLTEC), a coal power plant in Calaca, Batangas, in 2021, years before its supposed end of operations. Through a loan, ACEN said it could shut down the power plant by 2040, 15 years ahead of its technical life.
Civil society organizations worldwide had already raised alarm over the mechanism when it was introduced in 2021. In a statement, the NGO Forum on ADB said the mechanism would “absolve” coal companies from “internalizing the negative externalities they create” as it would be a form of “buying out” such firms.
How these discussions play out is detrimental to how the Marcos administration handles the Philippines’ transition to cleaner forms of energy, while battling energy security.
Energy security, too, is challenged by the brewing conflict between regulators and the country’s transmission operator, the National Grid Corporation of the Philippines (NGCP).
The Energy Regulatory Commission (ERC) is currently overseeing the fourth regulatory period and fifth regulatory period reviews of the transmission operator. The process would determine the final rates that the transmission operator may seek from customers from the periods 2016 to 2022, and 2023 to 2027.
A partial initial determination of the ERC for the fourth regulatory period review already saw the regulator disallowing operational expense claims of the transmission operator worth P3.7 billion. The cost included expenses on public relations and corporate social responsibility-related activities and advertising, to name a few.
A representative of NGCP defended these expenses as “bonafide transactions” of the company. END
Illustration by Joseph Luigi Almuena