Philippines – Department of Energy (DOE) Secretary Raphael “Popo” Lotilla spoke at the Pandesal Forum of Kamuning Bakery Café in Quezon City about the necessary efforts of the government, the private sector, and consumers in attaining the aggregate goal of energy security. On the supply side, Lotilla explained how the Philippines is currently a net energy importer, with more than 50% of its energy resources coming from abroad, rendering its supply and its prices exposed to the volatilities in the global market. On the demand side, Lotilla called on consumers to exercise electricity conservation, especially during peak hours, to help manage the thin supply margins.

Secretary Lotilla on the justification of tapping domestic sources, including that of renewable energy (RE): “We need to develop more of our indigenous energy resources. Our push for renewable energy is not just being pushed by the sustainability side or because of pressures from the international community. It is because the Philippines has not been as gifted with fossil fuels. But fortunately for us, on the renewable side, we have more of those resources.”

Lotilla also shared good news concerning the Malampaya gas field, the country’s only indigenous commercial source of natural gas: “We are on track to having the drilling for the nearby fields by the end of 2024, and we are looking forward to new additional supply from the same service contract by 2026. This good news is important in terms of encouraging more investments in exploration in the oil and gas sector.”

“The importance of natural gas to the country is that it is going to provide a backup for the uncertainties, for instance, in the supply of renewables. By nature, solar and wind are intermittent. When there are clouds above, then the solar panels do not work to their highest efficiency. When the winds are neither amihan nor habagat, then wind power will always be volatile. Therefore, we need natural gas to complement or to make up for those volatilities,” the secretary added.

On the development of nuclear energy, Lotilla said that the country will be on track within the decade to pursue this option but also noted how, at the moment, most of the smaller modular technologies are still at a demonstration stage, not yet the commercial scale and are, hence, more expensive. “It all depends on timing and pricing. We are working with the National Economic and Development Authority (NEDA) to work on a framework for private sector participation in the nuclear power space. Secretary Lotilla also said legislators are also working to come out with a new bill regarding Philippine nuclear development and the government shall support this.

Under EPIRA, the government is prohibited from entering into the generation space. But if there is a possibility or potential for the private sector to do it, then we should, by all means, encourage the private sector to do so.”

On the critical role of the generation, transmission, and distribution sectors in the power system, Lotilla said that the government will focus on necessary reforms like amending the secondary price cap and encouraging more competition in a generation; finishing much-needed transmission lines to complement the growth of more generation technologies, and ensuring that distribution utilities are run more efficiently.

On the transmission sector in particular, Lotilla argued: “The NGCP National Grid Corporation of the Philippines is the biggest monopoly in the Philippines. It is the one that can hinder or facilitate the progress or the entry of new generation capacity. We have the major projects still delayed. The NGCP is unique among companies in the Philippines in that Congress has given them a 3% franchise tax in lieu of all other taxes. That is intended to assist NGCP in its performance on the delivery of the transmission lines.

So with that favor granted by Congress and it has enjoyed this for the last 14 years – the people expect to have delivery.”

Lotilla cited cases of stranded capacity resulting from the transmission constraints, including when generated electricity from the GNPD power plants in Bataan, renewable energy in Negros island, and excess capacity from Mindanao were disconnected from the rest of the market due to the absence of power lines. Nonetheless, “when we have brownouts, it is not necessarily the fault of the generators or the transmission but it can be a localized problem due to the problems in the distribution utilities. The record is uneven. We have good electric cooperatives which are run well but we also have underperforming electric cooperatives.” Secretary Lotilla urged the public to be vigilant and speak up in case of bad service by rural electric cooperatives, to a political campaign for new board members or leaders or to run for positions, or to lobby for reforms or changes in the structures of cooperatives, not only to complain to the government.

Secretary Lotilla also underscored the government’s advocacy for energy efficiency and conservation, which requires more efficient use of electricity and the reduction of waste: “We want to encourage, for example, our industry and manufacturing sector to upgrade their facilities to more efficient ones. It makes business sense to do so because that will lower the energy cost of the manufacturing sector.”

Moreover, “consumers have the power to reduce consumption during peak hours, and therefore help reduce the need for additional power capacity, especially during the peak hours. Right now, the positive effect of reducing consumption during peak hours is that we do not have to run the peaking plants, which run on expensive diesel. If we avoid that, then we reduce the total cost of power to the consumers.”

Secretary Popo Lotilla also urged businesses, for example, 84-year-old Kamuning Bakery Cafe to install solar panels atop its roof to publicize and to set a good example for the private business sector and for households in the Philippines to pursue electric energy efficiency.

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Last time, I had a blast going to the Kamuning Bakery Pandesal Forum. Meeting other media, professionals, students, pandesal forum lovers, and benefiting from their insights was a lot of fun. Speaking with the Department Of Energy Usecretary Popo Lotilla was one of the highlights. He provided some advice on how to cut our carbon footprint, some of the country’s issues, and conserving our resources of energy. I gained a lot from Usec. Popo and it was another amazing experience, and I’m motivated to use his advice in my day-to-day activities that I can share with my family and friends.