Balance and transition in the Philippine energy sector

It is tempting to say that transitioning to renewable energy must be done at the soonest possible time, for the sake of the environment. There is no argument with this lofty goal. Dirty sources of energy, for centuries, have brought the planet the scourge of global warming. The impact has been devastating; the threats it poses, existential.

There are certain realities, however, that one must contend with. The Philippine population is growing, and its economy is rapidly expanding. Stable, sufficient, reliable, and affordable power is a requisite to our ability to respond to the needs of the people and to the demands of economic development.

Thus, a sudden shift, while environmentally desirable, is not yet realistic at the moment. Renewable energy (RE) sources are not yet as affordable and accessible as we would like them to be. At this point, these will not yet be able to provide the stability, sufficiency, reliability, and affordability that the country needs.

As a result, the Philippine Energy Plan (PEP) has identified a target balanced energy mix that the country would work towards at the start of every decade. Specifically, renewable energy sources are required to make up 35% of the total energy mix by 2030, increasing to 50% by 2040, and exceeding 50% by 2050. Having a balanced energy mix means utilizing diverse resources to reduce dependence on any single energy source.

The PEP also provides for the integration of RE and nuclear power. Nuclear power capacity is planned to increase to 1,200 megawatts (MW) by 2032, 2,400 MW by 2035, and 4,800 MW by 2050.

These goals are commendable, but ultimately the question boils down to whether they are even attainable at all. And they are — if we acknowledge that we cannot do it on our own and that we need to forge partnerships with like-minded nations. The transition requires massive investments in infrastructure, advanced technology, and policy innovation.

For instance, the Philippines’ growing relationship with Canada, a nation globally acknowledged as a leader in energy transition, bolsters our chance of achieving these targets and having a truly diverse and balanced energy mix. Canada itself has successfully phased out coal while integrating RE and nuclear energy into its energy mix. Its expertise in responsible mining and grid modernization also aligns perfectly with the Philippines’ needs.

Moreover, in a recent survey conducted by Pulse Asia, Canada ranked third among the most trusted partners for the Philippines’ national development.

It is thus with much enthusiasm and optimism that we at the Stratbase Institute, in partnership with the Embassy of Canada to the Philippines and Natural Resources Canada, recently held a Philippines-Canada Forum on Energy Transition.

During the forum, Department of Energy Undersecretary Rowena Guevara said: “Canada’s expertise in renewable energy and nuclear power and grid modernization presents immense opportunities for knowledge sharing and economic transfer. By cooperating with Canadian entities, we can accelerate the deployment of cutting-edge solutions for the Philippines. Joint ventures in energy technologies like hydrogen production can also strengthen both nations’ decarbonization efforts.”

She added that Canada’s development assistance and commercial initiatives could provide critical support for our energy transition that includes nuclear power starting 2040, ensuring that the shift to a low-carbon future is equitable and inclusive.

Partnerships likewise unlock crucial financing. According to Department of Environment and Natural Resources Undersecretary Analiza Teh, implementing the country’s Nationally Determined Contributions (NDCs) under the Paris Agreement will require approximately $72 billion.

“The greatest financing needs are in the energy sector, estimated to require an investment of $36.5 billion,” she said, adding that Canada’s stature in responsible mining would truly help the Philippines develop our own critical minerals industry to become a player in the global transition value chain.

International collaboration is also fully grasped by the private sector. Janssen Dela Cruz of Prime Infrastructure emphasized that the country’s grid is struggling to keep pace with its rapid energy expansion.

Jonathan Back, Group Chief Finance Officer and Chief Strategy Officer at ACEN, acknowledged the intermittence of renewable energy and emphasized his belief that nuclear power will play a significant role in shaping the Philippines’ energy landscape.

Canada has recently demonstrated its commitment to supporting the development of nuclear energy in the Philippines. During the inaugural Philippine International Nuclear Supply Chain Forum held last month, Canadian Ambassador to the Philippines David Hartman announced that Canada and the Philippines are nearing the conclusion of negotiations for an Administrative Arrangement, which will operationalize the 1983 Canada-Philippines Nuclear Cooperation Agreement.

Meanwhile, Jimmy Villaroman, President of Aboitiz Renewables, highlighted the challenges of integrating renewable energy into the grid. “Substantial investments in transmission and distribution infrastructure, as well as advanced energy storage solutions, are needed to ensure reliable and resilient energy systems,” he said.

Perhaps the best manifestation of Canada’s willingness to partner with the Philippines is the sheer size of its delegation to the trade mission — 300 Canadians from over 190 business organizations. Paul Thoppil, the Indo-Pacific Trade Representative for the Canadian government, emphasized Canada’s readiness to collaborate. Jean-Sébastien Fabry, Global Trade Policy Director at Natural Resources Canada, echoed this sentiment, affirming Canada’s willingness to “work alongside the Philippines in advancing its energy transition.”

Achieving a balanced and diverse energy mix according to plan is a challenge. Fortunately, for the Philippines, global leaders such as Canada are ready and willing to share its expertise and provide support. Through this, we can do right by our planet while also ensuring the economic security of the nation and our people.

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.