Energy Security Energy Transition

A balancing act for progress: energy security in the energy transition

September 03, 2024

With the dual challenge of increasing demand for energy as well as the reduction of carbon footprint, the energy sector faces a critical balancing act—one that considers both the Philippines’ immediate need for energy security and the long-term goal of a sustainable energy future.

For AboitizPower, one of the country's leading electric power companies, that strategy is about having “all options on the table”; an approach that recognizes how no single energy source alone can address the Philippines' complex energy challenges. Instead, a mix of technologies, including emerging and traditional capacities, is essential to ensure a stable and reliable power supply while transitioning to a cleaner energy mix with respect to the country’s context and capabilities.

Recent power outages and supply constraints underscore the urgent need for energy security in the Philippines. According to the Philippine Institute for Development Studies, with energy insecurity, the country stands to lose about P556-million for every five hours of power outage, significantly hurting local government revenues, the provision of crucial services, and economic competitiveness.

"The country's economic growth and development aspirations are heavily reliant on a consistent and sufficient power supply. To this end, we at AboitizPower are emphasizing the importance of establishing and maintaining energy security as a prerequisite for further progress," said AboitizPower Vice President for Corporate Affairs Suiee Suarez.

AboitizPower believes that a balanced portfolio of power generation assets—encompassing renewable energy sources, natural gas, and existing thermal power plant—will mitigate the risks associated with relying solely on any one energy source, ensuring better supply conditions and grid stability. Likewise, the transmission and distribution sectors are also critical in ensuring that the delivery of generated supply is timely, adequate, and reliable.

The role of natural gas in the RE shift

As the Philippines transitions towards a cleaner energy future, liquefied natural gas (LNG) emerges as a crucial bridge fuel. With the impending depletion of the Malampaya gas field and the moratorium on new coal-fired power plants, LNG offers a viable alternative, serving as a high capacity source that is less carbon-intensive than coal, while also offering the flexibility needed to complement the intermittent nature of renewable energy sources like solar and wind.

AboitizPower's planned investment in LNG, including two natural gas power plants and an LNG import and regasification terminal, further demonstrates how it supports the country's energy transition while ensuring energy security.

The Company is likewise at the forefront of the Philippines' renewable energy drive. AboitizPower has set an ambitious target to increase its renewable energy capacity to 4,600 megawatts by 2030, actively investing in solar, hydro, geothermal, wind, and energy storage system projects across the country. The recent energization of several large-scale solar projects and a binary geothermal power plant adds to the Company’s growing renewable energy portfolio—already the largest in the country based on installed capacity under its operational control.

A Balanced Path Forward

AboitizPower also recognizes the importance of energy storage systems. SN Aboitiz Power’s Magat battery energy storage system, which recently began operations, helps the Luzon grid by providing ancillary services to augment supply. It will be a vital part of an energy system with more variability and unpredictability, being a prime example of how a concert of different technologies can help stabilize the grid and support the integration of more renewable energy into the system.

With the transition to renewable energy being a complex and gradual process, AboitizPower notes that there is no one-size-fits-all solution for the country's power challenges. They believe that the energy system must be in sync with the Philippines’ context and capabilities, necessitating an “all options on the table” approach to improve people’s lives while steadily reducing its carbon footprint.

“While the Philippine energy transition is already in progress, there is still a significant journey ahead,” Suarez said. “The electrical power sector must work together closely in steadily increasing the use of cleaner electricity sources whilst balancing it with the priority of energy security.”

This article is written by Annelle Tayao-Juego of the Philippine Daily Inquirer.