Energy Policy Team2019-03-06T23:01:49+00:00

Energy Policy Team

The Energy Policy Team (EPT) helps advance the campaign to decarbonize the Philippine energy sector, with a sound theoretical footing, by pursuing climate and energy research and conducting technical and economic analysis.

It provides policy analysis to sector stakeholders and policymakers on key issues to accelerate the transition to a reliable, affordable, and sustainable energy system. Among others, it addresses implementation challenges in the transitioning of distribution utilities and electric cooperatives to a restructured energy sector. Together with government institutions, civil society organizations (CSOs), and academic institutions, the team actively participates in energy transition dialogues and policy development at the local and national level.

The team’s research agenda involves a wide array of energy issues, such as the need to establish real competition in the power sector, risks associated with stranded coal plant assets, renewable energy (RE) development in small island grids, technical and economic strategies that promote cost-effective RE penetration in Mindanao, and carbon pricing.

The team is engaged directly with the Department of Energy, the Energy Regulatory Commission, the Philippine Senate Energy Committee, the Mindanao Development Authority, Department of Finance, the National Electrification Administration, renewable energy developers, distribution utilities, and electric cooperatives, and works with international climate and energy policy groups and associations.

ICSC’s energy policy advisor, Jose “Viking” Logarta, is the convenor of CENTRE, a consortium of renewable energy experts, developers, advocates, and enterprises with goal of having a society harnessing reliable, clean, and affordable energy.

Administering the Carbon tax workshop

ICSC’s Executive Director, Red Constantino, speaks at the Carbon Tax workshop held last July 19-20, 2018 at the AG New World Hotel in Manila.

At present, the government is committed to tax reforms for equity and efficiency. The EPT has supported the initiative by addressing the external costs of fossil-fuel combustion through a carbon pricing mechanism that would drive polluters to reduce emissions down to levels consistent with the carbon price or tax.

The tax is based on social damage caused by the use of such fuels. In this regard, EPT conducted the first carbon tax workshop for key personnel of national government agencies (NGAs), including the Departments of Finance (DOF), Department of Energy (DOE), Department of Environment and Natural Resources (DENR), the Philippine Statistical Authority (PSA), and the Climate Change Commission (CCC). The science and impacts of climate change, economic valuation methodologies of those environmental impacts, and general principles of environmental regulation were discussed during the workshop.

Apart from that, the EPT also provided a broad understanding of the economy-wide impacts of taxing carbon. Thus, the participants gave their inputs in drafting a comprehensive carbon tax framework for the country, focusing on its essential design, as well as addressing the implementation issues.

Key personnel from various government agencies participated in the workshop on the carbon tax initiative in the Philippines led by ICSC last July 19-20, 2018 at the AG New World Hotel.

Releasing the initial Mindanao Report

Commissioned by ICSC, the exploratory study by Dr. Sven Teske of Institute for Sustainable Futures, University of Technology Sydney examined how the Mindanao grid could absorb the most renewable energy at the lowest cost. The renewable technology options cover the whole RE generation from small hydro and pumped storage, geothermal power, and onshore wind to solar photovoltaic (PV).

The study particularly focused on the technical requirements and cost-effectiveness of grid connection, integration of renewable power generation, and storage. It also addresses the challenge of unelectrified areas in Mindanao. In relation to this, the EPT conducted a series of activities to discuss the initial findings of the study, which include:

a. Workshop with the different bureaus of the Department of Energy;
b. Presentation of the results to Sec. Alfonso Cusi of the Department of Energy; and
c. Roundtable Discussion with relevant energy stakeholders which included government agencies, private institutions, civil society organizations, and academia, in cooperation with the University of the Philippines School of Economics.

Initial results of the Dr. Sven Teske’s exploratory study, referred to as the Mindanao report, were presented to Secretary Alfonso Cusi of the Department of Energy.

Preparing the petition for rulemaking before the Energy Regulatory Commission

The petition was premised on the prospect of RE with storage, competing with thermal technologies (coal, natural gas, bunker, and diesel) in the dispatchable segments of electricity supply covered by bilateral contracts. Such contracts involve independent power producers (IPPs) and distribution utilities (DUs), for the DUs captive markets.

The Energy Regulatory Commission (ERC) has not yet released a methodology for comparing bids with different projected price volatilities. Historically, the Commission has approved contracts based on the initial quoted costs (capital recovery, fixed maintenance and operating costs, and variable – mostly fuel – costs, that are automatically passed on to ratepayers). Thus, resulting to the envisioned petition for rule-making.

However, ERC conducted hearings on its draft rules for competitive procurement in behalf of captive ratepayers in the course of preparation. With regard to this, the EPT asked for the elimination of fuel pass-thru provisions in power supply agreements, removing the pass-thru mechanism for fuel for it will be more consistent with policies to promote renewable energy systems.