Experts urge PH power sector overhaul, exit plans for transition to renewables

Experts on Thursday stressed the need for a structural overhaul of the Philippine power industry, saying that President Ferdinand "Bongbong" Marcos Jr.’s fourth State of the Nation Address (SONA) failed to fully address the issue.

In a press conference on Thursday, economist and Ateneo de Manila University Professor Leonardo Lanzona said that while Marcos addressed some issues in the power sector, there was no mention of the system that, he says, works against consumers and innovation.

He added that if the government was indeed planning on using the power sector to develop flood control, giving out subsidies and solar handouts would not be a full-time solution.

“The idea is that energy policy cannot be distinct from climate policy… A full structural overhaul of the power supply sector is needed, starting with transparency, competition, and consumer empowerment. Floods are not just natural events, they are symptoms of infrastructure and governance failures,” he said.

“Unless understanding is matched by structural reform, the Philippines risks building a green agenda on an outdated and dysfunctional foundation. You cannot fix a flood-prone country by going after product contractors while subsidizing the emissions that cause the floods, and you cannot develop inclusive energy by giving subsidies but simultaneously relying on a system designed to exclude competition and consumer choice,” he added.

Meanwhile, Center for Energy, Ecology, and Development (CEED) executive director Gerry Arrances said that the government was lacking in the implementation of the renewable energy law.

Arrances said that while there were key strategies that could be implemented from other successful countries, these plans were not supported and were not implemented by the government.

He also noted that the President was able to actually tackle the increasing costs of electricity, and acknowledged his call against “corrupt officials” in the government.

“It is true that it is shameful that all the corrupt officials of the ERC, so many cases have been filed, sobrang dami na ng pronouncement of gaming, of manipulation and everything, and even announced by the President and the Department of Energy. Wala po lumalabas na findings sa lahat sa lahat ng investigation na iyon. Kung meron man na pinataw ang Energy Regulatory Commission ay mumo doon sa, in comparison sa ano ang kinikita ng mga korporasyon sa gaming na ginagawa nila o manipulation na ginagawa nila,” he shared.

Lanzones had said that their claims were not “new critique,” and had long since been identified as key reasons for the Philippines being named the most expensive power supply in Southeast Asia.

Both Lanzona and Arrances called for limiting the Philippines’ dependence on coal energy for flood control, and an acknowledgement that the Philippines is not yet ready for a fully-renewable energy supply.

They both also called the government to prepare exit strategies for the country’s transition to renewable energy.

“If we're going to tie up all of this flooding, energy, all of this environmental climate change, then it's important that we really have a program, a comprehensive program that will tie up all of these issues… At this time, parang we have to go through a transition kasi we're not yet ready to have fully renewable sources of energy. But we need to have some kind of exit plan. At what point, at when can we begin to realize this cleaner and cheaper sources of energy?” Lanzona asked.

“Why is that the law doesn't have an exit strategy? And that's the law.  And that's the challenge here. We all know already that coal, gas, and other fossil fuels will be stranded assets in economics, meaning it will not be more productive. Because of numerous reasons, it will be more expensive. Dahil una, iniimport mo siya eh.  So the policies in those countries can actually change and be stricter. It means you will bear the cost of higher resources… Yes, we are going to transition. And there has to be an exit strategy. Wala po yun,” Arrances added. — BM, GMA Integrated News