According to the Institute for Climate and Sustainable Cities (ICSC), the energy emergency highlights the need for the Philippines to accelerate the transition from imported fossil fuels to renewable energy (RE).
In an analysis, the think tank said its heavy reliance on fossil fuels left the Philippines vulnerable to global price volatility.
“The situation also highlights the clear and massive opportunity for our archipelago to transform the energy system with locally driven, fit-for-purpose solutions that optimize the abundance of renewable energy resources with available technology, creating a more affordable, reliable and secure power system for all Filipinos in on-grid and off-grid areas,” the group said.
While coal is the leading fuel in power generation, the Philippines aims to increase the share of RE to 35% by 2030 and 50% by 2040.
Last week, President Ferdinand R. Marcos, Jr. issued an executive order declaring a state of national energy emergency due to disruptions in global fuel supplies and rising oil prices.
While the measures cited in the order are necessary to allow the use of government resources to stabilize supplies, they are still not sufficient, the ICSC said.
As the impact of the crisis caused by the Persian Gulf crisis will be long-term, the ICSC said the Philippines should pursue structural reforms that reduce its vulnerability to global instability.
The think tank said that with the new induction of new capacity employing various renewable energy technologies, the Philippines is in a strong position to deploy local solutions and reduce dependence on imported fuels.
Since increases in electricity prices are fully and automatically passed on to consumers, the ICSC said the risks should be shared among relevant stakeholders.
“Authorities should review pricing mechanisms to ensure that generators, suppliers and utilities share in fuel price risks, efficiency improvements are encouraged and consumers do not face sudden price increases as a whole and immediately,” it said.
“Consistent, fair and robust monitoring of energy markets and enforcement of competition rules will ensure that consumers are adequately protected while the electricity system remains reliable,” the ICSC said.
To further ensure energy security, the think tank said the Philippines should expand its strategic petroleum reserves, increase minimum oil inventory levels and set clear protocols for energy conservation during emergencies.
ICSC also cited the role of rooftop solar systems in reducing electricity bills and demand on the grid. — Sheldin Joy Talavera