by Lenie Lectura | October 7, 2023 | Published by BusinessMirror | READ THE STORY HERE

DEVELOPING countries, such as the Philippines, would need financial assistance from industrialized countries in order to fully enforce energy transition plans towards a sustainable and low-carbon energy future, Energy Secretary Raphael Lotilla said.

The Philippines is committed to bring in more clean energy fuels and technologies for the next 17 years; specifically, 35 percent of renewable energy (RE) should comprise the country’s power generation mix by 2030 and 50 percent in 2040.

“Any transition is going to entail costs. And this means therefore additional cost not only for the developed countries but also even for developing countries like the Philippines. I am glad that this is a concern common to Asean. But since most of the Asean countries are not the ones responsible for the climate emergency, then the developed countries must provide resources that will enable the developing countries to finance their transition to low carbon technologies,” Lotilla said during a news conference.

No Quick Fix

LOTILLA also pointed out that the energy transition journey is not going to happen overnight. He said the Philippines needs to prepare for a longer period of transition, and if additional costs come with delays, then there should be “no transfer of burden and I have emphasized this in the past.”

Of the Asean countries, Indonesia and Vietnam have already entered into just energy transition partnerships. In the case of Indonesia, it received a pledge for $20 billion, while Vietnam got $15.5 billion.

“But unfortunately, even with these two countries who have been ahead of coming up with agreements, the progress has been slow,” and this accounts for “the realization that the transition is going to be slower than expected,” he said.

“In the case of Indonesia, after one year of negotiations, the most positive news that they came up with is that they were able to establish a secretariat,” Lotilla noted.

Financing Scheme

THE Philippines is not yet part of any Just Energy Transition Partnerships, but Lotilla has already called on the World Bank to support the country’s RE goals.

“My challenge to the World Bank and our other development partners… that the green transition or the climate transition or securing a clean energy future must be a just and fair transition.

“And that means that transition financing or climate financing or call it by any other name, such financing should be available to the country… unfortunately, we are not part of any of the Just Energy Transition Partnerships (JETP) that have already been put in place,” said Lotilla.

The JETP is a financing cooperation scheme that aims to help coal-dependent countries shift towards clean energy. It was launched at the November 2021 United Nations Climate Change Conference or COP26.

Signatories to the COP26 agreement agreed to phase out coal-fueled power generation in the 2030s for richer countries, and the 2040s for poorer nations.

In its report, the World Bank called the Philippines “uniquely positioned” to transition toward a renewable energy-dominated power system, seen to “not only improve energy security but also enhance affordability through primarily private financing.”

“The private sector, which has been driving developments and investments in the energy sector over the past decade, will need to take on more risks and hasten the pace of adoption of new technologies and innovations as the power system pivots to variable renewable energy sources,” said the report.

It added that the Philippines’s development partners would also be called upon to do more, especially in facilitating the flow of concessional climate investment funds and technology transfers.

Challenges up ahead

ASIDE from increasing the RE share, the Philippine energy transition plan includes a 5-percent energy savings on oil products and electricity by 2040; 10-percent electric vehicle penetration rate in road transport by 2040; exploring new and efficient technologies; adopting advanced and interoperable ICT in the energy chain; and resilient and climate-proof energy infrastructure.

While the DOE is confident such targets will be achieved, Energy Undersecretary Rowena Guevara said the country must address challenges in the electric power industry — the resiliency of infrastructures to natural calamities, and exposure to geopolitical conflicts.

“Specifically, we are challenged with providing affordable price of electricity to the consumers, while allowing the market forces to work and minimize the market distortions, such as market caps and subsidies. Second is ensuring supply security and grid reliability in this ongoing power sector transformation,” Guevara said in a recent forum.

As such, Guevara said the Philippines would welcome the opportunity to partner with the private sector, international donor community, and development partners to drive the transformation of the power sector in an “ambitious, just and sustained manner.”

USAID eyed

FOR instance, the DOE wants to tap again the United States Agency for International Development (USAID) for its technical assistance in identifying RE zones suitable for offshore wind and floating solar technologies.

The agency’s intent to launch another Competitive Renewable Energy Zone (CREZ) was conveyed to USAID, DOE Assistant Secretary Mylene Capongcol told a forum on wind energy organized by the Nordic Chamber of Commerce of the Philippines and NIRAS.

“We will discuss this officially. We have sent our official request so we will meet on this to talk about scope of work, timeline, among others,” said Capongcol.

The USAID and the US Department of Energy’s National Renewable Energy Laboratory were instrumental in crafting CREZ 1, launched in September 2020.

“CREZ 1 did not include offshore wind, floating solar. In CREZ 2, hopefully, if USAID will support, it will include those technologies involving bodies of water like offshore wind, floating solar, and possibly tidal,” said Capongcol.

There are 25 CREZ for solar and wind across the Philippines, which can produce 58,110 megawatts (MW) and 93,987 MW from solar and wind power plants, respectively.

Institute for Climate and Sustainable Cities Senior Policy Advisor Pedro Maniego Jr. had said that RE bares no supply limitations, and further increasing its share in the energy mix will entail more affordable, reliable and secure power to the country. He added that the country must move more aggressively and more urgently.

Photo: Gernysk, CC BY-SA 4.0, via Wikimedia Commons