We should look to renewables immediately

As climate change-induced heat waves, energy crises and inflationary concerns sweep across the globe, the Philippines sits at a critical junction with a new administration at the helm. Navigating a complex energy transition is notoriously difficult, especially while having to balance the need to adapt to climate change simultaneously.

President Ferdinand Marcos Jr. outlined his administration’s initiatives in his first State of the Nation Address last month, setting a sustainable energy agenda within the context of climate change. Stressing the need for cheap and reliable energy, renewables were highlighted as having immense potential in the country, particularly through wind and solar.

Marcos also briefly mentioned other renewable technologies such as geothermal and hydropower, and specifically highlighted the need to re-examine nuclear as an option. Other key considerations include expansion of transmission and distribution networks and strengthening electric cooperatives with the ultimate aim of reducing energy costs, particularly for households.

Overall, President Marcos outlined an admirable energy agenda, with the exception of one glaring, fossil-based issue: the “need” for natural gas.

Stating the long transition time needed to shift to renewables, “in the interim, natural gas will hold the key,” said Marcos. In a continuation of the previous administration’s efforts to develop natural gas in the country, Marcos stated that incentives would be granted to help development of the industry.

Here’s the catch: the entirety of the country’s natural gas sector is fueled by our only indigenous source in the Malampaya gas field, which is set to be fully depleted in a few years. Malampaya currently supplies five power plants for a combined installed capacity of 3,453 megawatts (MW). In the latest iteration of the Philippines’ Energy Plan put forth by the previous administration, natural gas supply will rely almost entirely on imports to replace local supply.

Natural gas imports have proven detrimental across the globe this year, driving global inflation. Russia weaponizing gas supply to Europe has led to a tumbling Euro, fears of recessions and a lack of energy security. Asian gas markets have not fared much better, with spot prices almost triple what they were last year. Supply crunches in countries such as Pakistan, Thailand, Myanmar and India coupled with increased demand from heat waves have caused power prices to soar.

The rational reaction to global LNG markets would be to transition AWAY from the fossil fuel, not towards it. Even prior to the current energy crises, investors in natural gas risked exposure to $14 billion in stranded assets. When compared against the already-cheaper option of renewables, there is clearly no need to develop the natural gas industry.

Wind and solar, technologies specifically highlighted by President Marcos, combine for a measly 0.3 percent of the country’s energy supply. Around the world, these technologies are being deployed at rapid scales, providing cheap, reliable and secure power. Prioritizing natural gas at this point would only serve to set the Philippines back, likely even increasing power prices for consumers.

If we are to achieve the proposed climate agenda and accomplish a clean and just energy transition, President Marcos should forego natural gas and look to renewables immediately.

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John Altomonte is the CEO of Verne Energy Solutions. An environmental scientist by training, he is an adjunct faculty member of the Ateneo de Manila University and serves as a consultant for the Senate of the Philippines and the World Wildlife Fund.