PHL can’t handle ‘fast’ transition to renewable energy — Balisacan

By Beatriz Marie D. Cruz, Reporter

THE PHILIPPINE ECONOMY cannot handle a “fast” transition to a dominantly renewable energy (RE) mix, according to the National Economic and Development Authority (NEDA).

“We have to buy time… meaning, we can’t force our country to transition quickly to a fully renewable or to a dominantly renewable (energy mix),” NEDA Secretary Arsenio M. Balisacan told reporters on the sidelines of an event on Friday.

“Our economy cannot handle that (a fast RE transition.) We have to be realistic,” he added in mixed English and Filipino.

Latest data from UK-based think tank Ember showed the Philippines has become the most coal-dependent country in Southeast Asia and the seventh in the world.

Ember data showed that the share of coal-generated electricity in the Philippines rose by 2.9% to 61.9% in 2023 from 59.1% in 2022, despite efforts to shift to renewable energy sources.

“We cannot simply adopt what very rich countries say. We are not in the same situation,” Mr. Balisacan said in mixed English and Filipino. “We are not as rich as they are — we don’t have the technology; we don’t have the finances.”

Despite allowing full foreign ownership of RE projects since last year, renewables still account for only 22% of the country’s power generation mix. The government wants to increase RE’s share to 35% by 2030 and 50% by 2050.

Mr. Balisacan noted that solar batteries would help “dramatically change” the energy ecosystem in the country, although adoption would take time if there are no improvements in the enabling environment.

As of February, the Department of Energy (DoE) has awarded over 1,300 renewable energy service contracts with a potential capacity of over 134,000 megawatts.

In a bid to lessen the country’s dependency on coal, the DoE in 2020 issued a moratorium on the development of new coal-fired power plants.

Mr. Balisacan said access to technologies and financing would help fast-track the country’s RE transition.

“When we committed, we said that we were going to achieve this under the condition that we have access to technologies (and) finances,” Mr. Balisacan said in mixed English and Filipino. “But those were so slow in coming. Many, not just us, developing countries have those issues.”

Jose M. Layug, Jr., president of the Developers of Renewable Energy for Advancement, Inc., said developed countries must ramp up infrastructure, investments, as well as cheaper and concessional financing to support the shift to RE in developing countries like the Philippines.

“Developing countries’ renewables transition, like the Philippines, is a big challenge especially since we already have high cost of power and we lack the necessary infrastructure like transition and ports,” he said in a Viber message.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the Philippines must seek financing for its renewables transition from the Green Climate Fund and the Global Environment Facility, which have previously supported the Philippines’ climate change adaptation, disaster resilience, and biodiversity projects.

“As such, they (government) are unwilling to tax those firms that still rely on coal energy and to institute the necessary regulations that will protect the society’s property rights for a cleaner environment,” he said in a Facebook Messenger chat.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the Philippines should continue to speed up the permitting process for RE projects, lessen ambiguities in regulations, level the playing field for investors, settle any related disputes, and ensure better cooperation with local government units.

“The biggest foreign investment commitments since last year have been in renewable power such as offshore wind, solar, and other RE projects. So, we have yet to see actual rollout of more RE projects, largely from the private sector, both foreign and local investments,” he said in a Facebook Messenger chat.