Notes for Secretary Cusi on the Philippine Energy Plan (Opinion)

Notes for Secretary Cusi on the Philippine Energy Plan (Opinion)

AT THE FORUM to update the Philippine Energy Plan (PEP), DoE Undersecretary
Jesus Posadas conceded that the plan is just a set of scenarios. "Just"
does not do justice to the effort, however, because dreams do have binding
constraints, and dreaming requires a lot of energy.
The role of policy makers and planners is to identify rules private agents
have to live by to get to the desired market outcomes.

Projections on the power market have to have firm basis in economic and
population growth, technology cost trajectories, and likely regulatory
innovations.

Our first concern on the updated PEP is the projected power capacity and
energy mix. The plan calls for a 30-30-10 electricity mix for renewables,
natural gas, and coal. Where did the 30% renewables target come from?

The Renewable Energy Act of 2008 listed the following policies: 1) Feed-in-
tariff system (FiT); 2) Renewable portfolio standard; 3) Green energy
option; and 4) Net metering.

Of the four measures, only FiT and net metering have been implemented. FiT
suffered delays after birth pains including non-transparent process and
overshot targets, especially for solar and wind. No solutions have yet been
offered to resolve the tariff issue owing to the overshoot in capacity
eligible for FiT, and the transmission problem in Negros. Biomass and run-
of-river hydro have been undersubscribed because of regulatory and tariff
issues.

In 2010, we raised these issues with then DoE Secretary Almendras. How were
the variable renewable energy targets set? The issue with the current DoE
Secretary Cusi is, how are you setting targets?

We support Secretary Cusi's thinking that the next round of FiT
allocations for wind and solar be undertaken through auctions via free open
system and with a series of tenders. But biomass and run-of-river hydro
will not survive this process because of large pre-development costs.

Now let's take a look at how Philippine energy policy affects our
commitment to the Paris Agreement. Some institutions say that mitigation
measures for our power sector cannot be undertaken without external
support. However, a study done for the Climate Change Commission lists
mitigation measures that have zero to negative incremental costs. And this
is what planners need to prioritize.

The Philippines succeeded in getting China to respond positively to
vulnerable countries' call to ensure economic development and climate
protection. In a historic first, during the CVF meeting in COP22, Mr. Xie
Zhenhua, China's Special Representative of Climate Change, affirmed that
climate action to keep warming below 1.50˚C will pump economies.

China officially stated to CVF that "we want you to know China will be a
strong partner in helping to develop the right strategies that make your
economies more resilient and which can help develop low-carbon strategies."

China's public statement of support is important for the Philippines
because of its strong commitment on technology and financial support for
the necessary infrastructure upgrades we desperately need to build
resilience such as electricity grid modernization, low-emission transport,
and access to urban services.

Despite the US election outcome, Australia, Pakistan, and Italy moved
forward and ratified the Paris Agreement. China and Saudi Arabia have
publicly vowed to adhere to the Paris Agreement.

The climate is changing too rapidly and policy is almost always left
behind, unless we have visionary leadership. China is the world's largest
investor in renewable energy and will have a big role to play in the
Philippines.

Secretary Cusi, the ball is in your court. It's time for more due
diligence and for you to lead the charge so our people survive and thrive.

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Link to Original
Article: http://www.bworldonline.com/content.php?section=Opinion&titl
e=notes-for-secretary-cusi-on-the-philippine-energy-plan&id=137993

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com