Energy Security

“All-options-on-the-table” action needed for energy security

July 02, 2024

Makati City — In an event by the Stratbase ADR Institute and CitizenWatch Philippines entitled “Advancing Energy Security: Fueling Sustainable Progress with Liquefied Natural Gas” held at the Asian Institute of Management, AboitizPower Chief Corporate Services Officer Carlos Aboitiz advocated for an “all-options-on-the-table” approach to the Philippine energy transition.

This entails a just and balanced strategy of maximizing existing, traditional capacities; integrating emerging technologies; and working with dispatchable and variable renewable energy, along with battery energy storage systems, to ensure grid stability and reliably meet electricity demand, while gradually decarbonizing the system.

“In the energy sector, we provide value to society by providing energy when it’s needed at a reasonable cost and with the least adverse environmental impact,” Aboitiz shared. “Sometimes, achieving one objective means compromising on another, making this a supremely difficult job.”

Aboitiz contextualized the Philippine experience, citing an erratic power supply, unsubsidized rates, and ambitions of becoming an upper middle-income economy.

“In the Philippines, we’re experiencing energy insecurity as evidenced by the many red and yellow alerts. This is the result of demand growing faster than expected, constrained supply growth, and an inadequate transmission and distribution infrastructure,” he outlined.

“Given our context of energy insecurity, higher than average power prices, and lower than average emissions per capita, we believe that our priority should be to secure our energy system at the lowest possible cost to the consumer,” he further explained.

On liquified natural gas (LNG), Aboitiz said that it has an important role to play as a bridge fuel in the energy transition — allowing for more indigenous, variable renewable energy sources to enter the grid — as well as a bridge to getting impoverished Filipinos out of poverty and into modern society.

“Gas is flexible, able to easily ramp up or down as needed, and therefore is a more cost-efficient alternative for mid-merit energy needs and for some ancillary services. It’s also dispatchable, unlike renewable energy, which means it is there when we need it,” Aboitiz said.

“It [also] helps us to diversify our upstream fuel supply from coal, allowing for some balance to manage discrete risks to coal supply.”

To recall, AboitizPower recently acquired a stake in Chromite Gas Holdings, which plans to buy a majority interest in two gas power plants, which has a combined capacity of 2,500+ MW, and a terminal for importing LNG.

“AboitizPower is investing in the LNG future of the Philippines, while we continue investing in renewable energy to try to strike a balance between energy security, affordability, and sustainability,” Aboitiz said.

“But it’s also really important to understand that, while we’re focused on LNG today, not one technology is going to solve all these problems to achieve all those objectives. So we have to look at it within the context of a larger energy mix and specific country context,” he added.

Aligned with the Philippine government's target of a 35% share of renewable energy in the nation's energy mix by 2030 and 50% by 2040, AboitizPower had indicated its goal to build 3,700 MW of new renewable energy capacity en route to 4,600 MW by 2030. This includes projects in solar, wind, geothermal, hydro, and battery energy storage systems.

“Everything we do must first be with the consumer in mind — the Filipino in mind, fundamentally — and with that I think we will be successful in both advancing the human transition and the energy transition,” Aboitiz maintained.