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Renewable Energy Development and Deployment in the Philippines: Current State of Affairs and Future Directions

February 26, 2016

Keynote Speech of Senator Loren Legarda
“Renewable Energy Development and Deployment in the Philippines: Current State of Affairs and Future Directions”
Forum on Making Renewable Energy a Vehicle for Inclusive Growth
26 February 2016 | IFC Headquarters, Bonifacio Global City

 

We toil today to provide a brighter future for our children. But that future can be bleak, dark and dirty if we go business as usual, if we continue to burn fossil fuels, if we continue to believe that coal is cheap, if we continue to rely on oil to fuel our needs.

 

The late Nelson Mandela once said, “Sometimes it falls upon a generation to be great. You can be that great generation.”[1]

 

Yes, we can be that generation. We can do so much to change the way we fuel our development so that we leave a greater future for our planet, for our children.

 

Is it not ironic that 16 million Filipinos[2] continue to live in the dark due to lack of access to electricity when we have more than 200,000 megawatts of untapped renewable energy capacity? This is thirteen times more than our current installed capacity.

 

Before I proceed to discuss renewable energy development in the Philippines, allow me first to correct the long-held belief that “coal is cheap”.

 

Coal is definitely not cheap. Coal affects our health, kills biodiversity and the environment, affects our waters, pollutes the air we breathe and increases the risk of climate change. If we input all of these in the cost of coal, we can no longer say that coal is cheap.

 

As a developing nation, the Philippines needs more energy, but it cannot be “we need power at all costs and we will develop at all costs.”

 

Why do places with no renewable energy resources have more RE than us? Germany is known as the solar capital of the world, but only receives half the sunlight of the Philippines. In Europe, they are scaling down on coal, while the Philippines has approved 21 new Environmental Compliance Certificates (ECC) for coal as of 2015.

 

The sustainable development-energy nexus requires an urgent examination of how we can tap on the power of innovation and new technologies to provide for the energy we need in a sustainable and inclusive manner.

 

I was among the co-authors of the Renewable Energy Law in 2008. Our laws are hailed as among the best in the world, but without strict and effective implementation they are of very little use. At the time, people considered that renewable energy sources like wind and solar would only become a small share of the energy mix. Since then, we have seen installations increase, with hundreds of megawatts of solar and wind in excess of even the Department of Energy’s (DOE) targets back then. But we are still far away from tapping and maximizing RE’s potential.

 

What is the potential of renewable energy for the Philippines?

 

The major forms of RE being utilized in the country today are geothermal, hydro, biomass, solar and wind.  Ocean energy is also currently being developed, although not yet in use.

 

The DOE’s estimates on the country’s untapped renewable energy resources are as follows[3]:

  • 5.1 kilowatt-hour per square meter per day for solar
  • 13,097 megawatts for hydropower
  • 2,600 megawatts for geothermal
  • 70,000 megawatts for wind
  • 170,000 megawatts for ocean

 

We are a country rich in renewable energy, the amount of sun and wind is more than enough to power our entire country many times over, and we must take greater steps to harness these abundant natural resources to ensure a sustainable future.

 

The National Renewable Energy Program has set out aggressive targets on renewable energy development from 2011-2030, aiming to increase RE capacity to 15,304 megawatts by the year 2030.

 

We have the legal framework that provides the necessary policy mechanisms such as the Feed-in Tariff, Net Metering, Renewable Portfolio Standards, Green Energy Option, Renewable Energy Market, and other fiscal incentives such as income tax holiday.

 

There have been challenges, however, in our efforts to fast-track the development of our renewable energy resources more aggressively. Impacts on electricity pricing have been a major consideration among our regulators, particularly as we already have one of the highest electricity rates in the world.

 

But we take note of the DOE’s efforts on streamlining the Renewable Energy application process of service contracts. The agency has fast tracked the approval of pending service contracts by cutting the application process from two (2) years to forty-five (45) days.[4] Though there had been a significant increase on renewable energy installations, RE only accounts for more than a third of the country’s total energy demand, thus, still not reaching its maximum potential. [5]

 

There are two compelling reasons for accelerating the development and utilization of renewable energy in the country – energy self-sufficiency and environmental sustainability.

 

Growth is difficult to imagine without energy; and energy that does not take into consideration the needs of future generations can only destroy and not build. Development, progress, and quality of life cannot be the exclusive domain of a few.

 

Inclusive growth begins with making basic services available to all.  Fostering the participation of micro, small, and medium enterprises in the regional and global markets, much less in the domestic supply chain, will not happen unless energy access is guaranteed to everyone.

 

With the onset of technological innovations in energy, achieving universal access to clean energy technologies is within reach. As I have mentioned earlier, estimates indicate that we have more than 200,000 megawatts of untapped renewable energy capacity. Failure to develop these capacities would be unforgivable.

 

The government needs to focus on promoting the growth of the low-carbon economy as a means to create jobs and curb carbon emissions.

 

Other countries are already gaining jobs and riches from renewables. In Europe, 650,000 jobs have been created in the renewable energy sector. The US employs 75,000 citizens in the wind industry and more than 100,000 in the solar industry.[6]

 

It has been found that renewables, as opposed to fossil fuel industries such as coal, often produce higher-value, better paying, cleaner, healthier jobs.[7] With hundreds of thousands of untapped renewable energy resources and the legal framework to develop RE in the Philippines, renewable energy is sure to create thousands of good jobs for Filipinos.

 

Moreover, renewable energy is recognized as a long-term solution to the global effort to avert climate change. It could help mitigate the environmental impacts of our expanding energy use. But at the same time, the energy sector must be climate-proof. This is crucial for the Philippines, which is among the top five countries most vulnerable to climate impacts and natural hazards.

 

The energy infrastructure system receives the brunt of disaster impacts. This results in disruptions in businesses and in the delivery of services.

 

Interconnecting systems is considered as one of the most critical features of the energy sector. Natural hazards put the highly interdependent energy system at risk.  Disturbances in the energy system, in turn, upset economic activities and cause distress to other critical infrastructure sectors, like transportation, water supply and communications.

 

We need to give focus on risks, as understanding our vulnerabilities supports decision-making in the context of climate change.

 

The approach we must advance is the incorporation of information parameters and benchmarking in carrying out vulnerability assessments and emergency response planning. Our aim is to identify major energy networks that may be compromised by natural hazards.

 

I have authored two laws, the Climate Change Act of 2009 and the Philippine Disaster Risk Reduction and Management Act of 2010, which mainstream disaster risk reduction management and climate change adaptation in the development processes in policy formulation, socio-economic development planning, budgeting and governance in critical areas, including the energy sector[8].

 

Our experiences with Typhoon Haiyan in 2013, whose intensity is unmatched in recent history, give us crucial lessons.  The total damage to the electricity sector then was estimated at US$ 155 million[9]. The distribution utilities were the hardest hit, which accounted for 76 percent of the total damage to the energy sector, causing disruptions in electricity supply to residential consumers and public buildings[10].

 

This underscores the importance of building adaptability in the energy sector.  Climate proofing the energy infrastructure has clearly become a necessity. The government must work with the private sector to develop clean and energy-efficient, climate-friendly technologies.

 

Last year, the Philippines committed to achieve the goals under the Sendai Framework for Disaster Risk Reduction, the Sustainable Development Goals, and the country’s Intended Nationally-Determined Contributions.

 

The energy sector has a crucial role to play in achieving these goals. My challenge to all of you today, both government and the private sector, is to put climate action and the sustainable development goals at the core of your mission and at the heart of your respective organizations’ programs and development agenda.

 

This forum is indeed an opportunity to involve ourselves in the continued sharing of information and experiences that facilitate the development of our respective capacities and potentials.  Towards this end, we can show solidarity, share scientific knowledge, and work within the framework of mutually beneficial partnerships.

 

Together, let us tread the path that will lead our nation towards a brighter, livable, resilient and sustainable future.

 

Thank you.

 

 

[1] Nelson Mandela’s speech before the Trafalgar Square Crowd, February 3, 2005, calling attention to 2005 as a great opportunity for change.

[2] Philippine Institute for Development Studies, 2013

[3] Department of Energy http://www.doe.gov.ph/renewable-energy-res

[4] https://www.doe.gov.ph/doe_files/pdf/Issuances/DO/DO2013-10-0018.pdf

[5] 2014 Fuel Input and Power Generation (Input vs Output) – DOE Budget Briefer

[6] Green is Gold: How Renewable Energy can save us money and generate jobs, Greenpeace, 2014

[7] Ibid.

[8] www.ndrrmc.gov.ph

[9] Reconstruction Assistance on Yolanda, www.neda.gov.ph

[10] Id.