The Philippines remains to be energy insecure, according to a study published by state think tank Philippine Institute for Development Studies (PIDS) yesterday, thus recommending the development of indigenous resources and reducing reliance on imports.
According to PIDS’ latest policy note, the government must also implement reforms that will enable grid expansion and modernization, promote further competition in the market, assess the electrification program for unserved areas and pursue a clean energy transition.
“The Philippines is currently energy insecure, as evidenced by certain indicators on energy sufficiency, reliability, resilience, affordability, accessibility and sustainability,” according to the report, Evaluating energy security in the Philippines: an indicators-based assessment.
“Policy reforms and specific actions are needed to improve these indicators and enhance energy security,” it added.
The study found out that the Philippines’ share of indigenous sources and self-sufficiency ratio are declining, and that the country’s import sources are not highly diversified, making it vulnerable to the sudden unavailability of major sources.
“Demand is well managed, and energy efficiency is increasing, but it still needs improvement given the country’s resource sufficiency insecurity,” it said.
On reliability, the electric power reserve margin based on dependable capacity is enough, the study said, but it noted many instances when the available capacity became so low that the reserve margin became tight.
“Power interruption is still a problem. Energy commercialization rate has been stagnant, suggesting slow improvement in the domestic supply chain infrastructure. The Philippines’ resilience to oil supply shocks is also low, given the high concentration of its import sources and low average daily inventory,” it said.
It further pointed out that affordability of final energy use is a bigger problem in the Philippines than in other Southeast Asian countries.
“Universal access to electricity has still not been attained. Sustainability is also a concern as Filipinos are currently on a high CO2e (carbon dioxide equivalent) emissions path,” it said.
To further develop the country’s indigenous resources and reduce its reliance on imports, the policy note said it is necessary to clarify the investment framework for upstream energy development.
“Crafting policies that supplement the regulatory framework for upstream activities provided by Presidential Decree (PD) 87 and PD 1459 is imperative, along with finding ways to hedge against risks from low diversification of import sources,” the report said.
To improve the reliability and resilience of the power system, the report said reforms that will enable grid expansion and modernization must be implemented.
“These include ensuring adequate contracting of ancillary reserves in the transmission sector and upgrading infrastructure in the distribution sector,” it said.
The study also noted the need to promote further competition in the electric power market to help reduce prices, while reducing the demand for petroleum by facilitating the transition to clean energy in the transport sector.
“To improve the accessibility of electric power services, the electrification program for unserved areas must be assessed to identify further improvements in the implementation,” the report said.
“To improve environmental sustainability, it is crucial to educate users about practicing energy efficiency and pursuing a clean energy transition through industry support and green finance,” it added.
