Government urged to come up with energy supply mix

MANILA, Philippines — The government should urgently come up with a long-term and defined energy supply mix to attract new investments in the power sector to increase the capacity in the power grid and meet the country’s growing demand, according to the country’s power industry watchdog.

ERC chairperson Agnes Devanadera said there should be a definite energy supply mix specifying which technology and how much capacity would be added annually.

She said specific targets in terms of capacity and technology would provide investors with better signals on where to invest.

“We must have an energy mix. A defined energy mix which should (tell) how much should be in renewable energy, how much should be for solar, wind or for other technologies,” Devanadera said.

Moreover, the target supply mix should likewise be fixed for the next 40 years since investments in power projects are capital intensive and long term in nature.

A shifting energy mix would leave investors with stranded investments and will turn away future investors, the ERC chief said.

“Just like in other countries, they have their energy mix set for the next 40 years and there are targets per year, per technology. So, we should have that as it is very important. Energy mix will guide policies, investors, zoning and mapping,” Devanadera said.

The current administration has espoused a technology neutral policy on new power developments as long as they meet the requirements of the country.

The technology neutral stance, Energy Secretary Alfonso Cusi had said, was aimed to foster competition so that the country will have adequate and reliable electricity supply while sustaining economic growth.

At present, the country sources most of its electricity supply from coal at approximately 44 percent. In off-grid areas, electricity supply from oil-based plants is at 87 percent, based on ERC data.

But with the global push to shift to clean power sources to mitigate the impact of climate change, the government is now pushing for the development of renewable energy and nuclear to tilt the energy mix away from coal.

However, Devanadera said there has been no fixed target energy supply mix with definite ratio for the share allocated to renewable energy and share allocated to other types of sources.

Under the Philippine Energy Plan (PEP) 2020-2040, the DOE has set a target to increase the renewable energy share in the power generation mix to 35 and 50 percent by 2030 and 2040, respectively.

As of end-2020, renewable energy corners 21 percent of the country’s total power generation mix.

And while nuclear energy is being eyed to be included in our existing supply mix, there still remains an uncertainty as to how nuclear energy shall be incorporated in our supply mix, Devanadera said.

Coming up with an energy mix also requires urgency with the country’s growing list of ageing coal plants, which have been suddenly going into forced outages resulting in thin power supply and, worse, brownouts.

“Another thing is we have very old power plants. Some are 16 years old, and they are still being used, so that’s the reason why there should be new capacity,” the ERC chief said.

But laying down the energy mix would also require a whole of government approach to identify the requirements and address the gaps in the power sector.

“There has to be consultations with other agencies like National Economic and Development Authority (NEDA) because, remember, it should go side by side with the development plans for the Philippines,” Devanadera said.

For nuclear power, a dedicated agency should be formed to focus on laying down the foundations necessary for its inclusion in the energy mix.

“We should really have specialists on this since it’s a new technology, something’s that big, something that we have not known before. For us, there should be an agency to help, to look into, to shepherd the incubation of these ideas,” Devanadera said.

Last February, President Duterte signed Executive Order (EO) 164, which details the adoption of a national position for a nuclear energy program to help in securing energy security.

Adopting a national position for a nuclear energy program is necessary first step for the country to introduce nuclear power in the power mix.