The Department of Energy challenged developers and financiers to design long-term financing mechanisms for high-capital-expenditure power projects.
It said this would support the continued growth of renewable energy, meet the government’s target of up to 50 percent renewable energy share in the generation mix by 2040 and ensure future energy security.
Energy Secretary Raphael Lotilla cited capital-intensive projects such as transmission facilities, pumped-storage hydroelectric plants and nuclear plants as examples of infrastructure investments that will remain valuable for decades, benefiting multiple generations.
DOE challenge
“My challenge to all of you here, particularly to developers and financial institutions, is to collaborate in designing mechanisms that allow future generations who will benefit from these infrastructure investments to share in the burden of the transition with the current generation. This is a true form of multi-generational or intergenerational equity. By identifying the necessary steps to unlock long-term financing, we can reduce the upfront costs of the transition for today’s consumers while ensuring that critical projects move forward, delivering equal benefits to multiple generations,” Lotilla said.
Lotilla said the country’s clean energy transition approach is grounded in the principles of increased inclusivity, resiliency and sustainability.
“It is in line with goals set out in the Philippine Development Plan, which targets an annual economic growth rate of over 6 percent from 2024 to 2028. The scenarios in the Philippine Energy Plan 2023 to 2050 serve as strategic projections designed to guide us in achieving a secure, sustainable, and inclusive energy future, flexible enough to adjust to changes in technology, changes in financing, and other factors. We are also working to achieve 100-percent household electrification by 2028 by investing in last-mile connectivity and promoting microgrid systems,” Lotilla said.
RE integration
The energy chief said the government’s ongoing efforts will accelerate the integration of renewable energy, especially in areas that would otherwise rely on fossil fuels.
“At the heart of our energy transition is a strong commitment to developing and maximizing our indigenous and renewable energy resources, which in the long run will contribute to energy security and affordability. We have implemented policies that foster a capable business environment for investments in the sector and have welcomed investors, both foreign and domestic, not only in the renewable energy sector but also in other sectors of the energy industry,” Lotilla said.
Lotilla said that diversifying energy sources is fundamental to ensuring the availability of adequate, reliable and sustainable energy for all.
Diversified sources
“Central to our approach is the development of a smart grid transmission system, which is essential for seamlessly integrating the growing capacities of renewable energy into the grid. This advanced infrastructure will not only enhance efficiency but also strengthen the resilience of our energy network against future challenges,” he said.
Lotilla said is also important to recognize that the cost of large-scale deployment of energy storage technologies remains high, which means conventional energy technologies will continue to play a critical role in the country’s generation mix during this transition.
“Natural gas is therefore well-suited to balance the variability of renewable energy and can serve as a reliable transition fuel,” he said.
Lotilla also assured the government’s support, as President Ferdinand Marcos Jr. emphasized the importance of accelerating and simplifying the permitting process for energy projects.
He said the Cabinet recently held a sectoral meeting to address concerns relating to various energy projects and agreed to undertake simultaneous parallel processing of permits by different agencies.
Inter-agency cooperation
“The delivery, insofar as the permitting system is concerned, is not by the department alone but by a number of institutions in government at both national and local levels. And therefore, the changes that are necessary in order to facilitate the implementation of energy projects require the utmost cooperation among the agencies concerned. And if in this and in the integrations that you have seen in the policies that we have issued,” he said.
Lotilla said the Department of Environment and Natural Resources initiated its own review of internal processes and will implement parallel processing of permits.
The DENR is no longer waiting for the National Commission on Indigenous Peoples to issue permits but will process them in parallel, subject to final issuance by the NCIP, he said.
The NCIP is also reviewing its policies and is cooperating to facilitate permits that do not require the entire process.
“For example, the law itself specifies that the jurisdiction of the NCIP is over areas that are onshore or on land as well as offshore, but limited only to those waters that are within the baselines of the Philippines, in which case, areas outside of those baselines are not covered by the jurisdiction of NCIP,” Lotilla said.
The NCIP has been transferred to the Office of the President, and the DOE expects better coordination among agencies.
The DOE said it would also utilize the network of the Department of Trade and Industry and the Board of Investments to address issues at the local level.
Meanwhile, the DOE reviewed existing service contracts that have not progressed and given opportunities to explore resources.
“The energy sector plays one of the most critical roles in our development journey. On one hand, providing access to affordable and reliable power allows for greater investments in our industries. On the other hand, we also need to ensure that our development is sustainable in order not to be left behind in a world where the demand for clean energy and green industry will only continue to grow,” said Lotilla.
