Seizing growing opportunities in renewable energy
An energy crisis is perhaps one of the biggest global issues of our time, second only to climate change in terms of how they threaten the development of countries all over the world, including the Philippines. “The first truly global energy crisis, triggered by Russia’s invasion of Ukraine, has sparked unprecedented momentum for renewables,” the International Energy Agency (IEA) wrote in their Renewables 2022 report.
Also in the report is how “fossil fuel supply disruptions have underlined the energy security benefits of domestically generated renewable electricity, leading many countries to strengthen policies supporting renewables.
Meanwhile, higher fossil fuel prices worldwide have improved the competitiveness of solar PV (photovoltaics) and wind generation against other fuels.”
In particular, the Philippines is facing its own crisis, with rising prices and an uncertain future regarding the depleting Malampaya natural gas fields, which supplies 30 percent of Luzon’s energy consumption.
The Philippines must maximize its use of existing fossil fuels and renewable energy sources, according to the government, if it is to achieve energy independence in the future.
It is expected that, going by the rate at which the country is expanding, the Philippines will need to build another 43 gigawatts (GW) of capacity to be able to support growth.
For the rest of the world, the answer to the energy crisis is simple. Given many consumers’ increasing disdain for fossil fuels and their inextricable link to the acceleration of climate change, many governments are turning to renewable energy (RE) to kill two birds with one stone.
According to the IEA, renewable power is poised to overtake coal as the largest source of electricity generation, with a total capacity growth worldwide expected to almost double in the next five years.
The Renewables 2022 report noted that Russia’s invasion of Ukraine has prompted many countries to increase their investments in renewable energy sources like solar and wind power to lessen their dependency on expensive imported fossil fuels.
As a result, the world’s renewable power capacity is predicted to rise by 2,400GW between 2022 and 2027, which is equivalent to China’s current power output in its entirety.
The analysis sees renewables accounting for more than 90 percent of global electricity expansion over the next five years, making them the world’s primary source of electricity in the early years of 2025.
In the Philippines, President Ferdinand R. Marcos Jr.’s administration has stated its commitment to paving the way for a quickening and widening of the country’s development of its domestic energy supplies.
Specifically, the country is working to boost the percentage of renewable energy in the power mix from its current 22 percent to 35 percent by 2030, and 50 percent by 2040. At this time, RE accounts for 22 percent of all electricity produced.
Allowing complete foreign ownership in the RE sector is one of the most recent major measures supported by the Department of Energy (DOE) in pursuit of this goal.
To allow for 100 percent foreign capital in RE projects, Energy Secretary Raphael P.M. Lotilla recently signed a circular revising the implementing rules and regulations (IRR) of the Renewable Energy Act of 2008. Previously, foreign ownership in RE projects was restricted to 40 percent under Section 19 of the IRR.
Under the Philippine Energy Plan 2020-2040, the DOE wants to push the country towards a clean energy future by pursuing policies that would attract more investments in RE, institutionalizing energy efficiency and conservation programs, and promoting the use of clean energy.
Among these initiatives is the Green Energy Auction Program (GEAP), for which the second round is scheduled for June for capacity coming online in 2024. The DOE expects the results of the program to generate 11,160 megawatts (MW) of RE for use in the coming year.
The GEAP is targeted at accelerating investments in new or additional renewable energy capacities to ensure the provision of adequate supply and competitive rates of electricity in the country.
The initial Green Energy Auction, which was held in 2022, yielded an additional volume of roughly 2,000MW for the country’s RE supply.
Other programs such as the Net Metering program allows consumers to install an on-site RE facility not exceeding 100KW in capacity so they can generate electricity for their own use.
As the world seeks to adopt more sustainable, renewable sources of power, the Philippines must continue to push for such initiatives, not only to support its own growth, but to keep a competitive edge on the global stage.
“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalize on their energy security benefits. The world is set to add as much renewable power in the next five years as it did in the previous 20 years,” IEA executive director Fatih Birol said in the Renewables 2022 report.
“This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system. Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5°C,” he added.