ON March 26, The Manila Times held its 2026 energy forum with the theme “Addressing current energy challenges, building a secure and sustainable energy future” — and yes, that was my idea. And I probably shouldn’t keep referring to it as the “2026” energy forum, because it almost certainly will not be the last one for the year. We have many other things to discuss. Some of those, as a teaser to those interested, include the electric vehicle sector; proposed amendments to the Electric Power Industry Reform Act of 2001; and policy, regulatory and infrastructure support planning and strategy for the effective integration of large-scale renewable energy (RE) in the country.
That will all come later; however, I’m sure that everyone concerned with this forum needs a bit of recovery. Given the prevailing circumstances, and especially with the forum being held immediately after President Ferdinand Marcos Jr. signed the declaration of a “national energy emergency,” getting this together was extraordinarily stressful. Special acknowledgment needs to be given to my colleague Denise Calnea and her team, without whom we would not have been able to pull it off at all.
My intention for the forum discussions was to find answers to two basic questions: in the context of the electricity sector, what needs to be done right now to mitigate the impact of the energy emergency, and what needs to be done from this point forward to prevent, or at least better protect the country from a future emergency? Although memories are short, we have been through this, with alarming regularity, four times in less than a decade: the Covid-19 pandemic in 2020; the start of the war in Ukraine in 2022; the Red Sea crisis corresponding to the start of the war in Gaza in 2023; and now the current and, by far, the worst crisis.
There is, in a sense, good news and bad news. The good news is that, at least as far as the power sector is concerned, there is no supply shortage, at least for now. There are ample stocks of coal, and more available from Indonesia. Likewise, there is a sufficient inventory of liquefied natural gas (LNG), and more on the way from alternative sources such as Canada. Diesel fuel for the many (about 800) small generation plants around the country could become a problem in the next several weeks or months, but for now, it is not. And of course, there is a substantial amount of no-fuel-required RE power available, and more set to come online very soon, although it has some limitations due to its variability. Provided that generation operators take care to keep their plants running or available to run, we will not have to worry about electricity supply shortages.
Higher rates
The flip side of that is that fuel has become expensive, which has been discussed at length over the past couple of weeks; and that, as a consequence, generation has also become expensive, which is reflected in higher rates on our electricity bills. As I have said before, there is no way for any of us to avoid higher rates entirely, although under the “energy emergency” conditions, some steps have been taken to try to keep generation costs in check. These include suspension of the Wholesale Electricity Spot Market (WESM) by the Energy Regulatory Commission (ERC), which, in simplified terms, acts as sort of a price freeze for spot purchases; a directive from the ERC to generators and distributors to ensure that existing power supply agreements are maximized because those generally have predetermined generation rates; and a directive that lower-cost RE supply should be dispatched first. It already is, anyway, but it will be more closely monitored.
I am not convinced that the suspension of the spot market would not lead to elevated rates later as generators attempt to recover stranded costs, and I find it a bit troubling that the spot market was suspended (as of March 26) before the alternative pricing mechanism framework was in place (it is being finalized, and is due to take effect on April 1). However, for the immediate situation, it seems that everything that can be done to reduce price shock is being done.
The bad news, however, is that substantial and sustainable solutions to effectively manage the next crisis and the ones that will inevitably follow in the future will take a great deal of time. Developing RE as a form of baseload power will require a great deal more capacity, and a great deal of grid development, including the application of some technologies that are new to the Philippines and are definitely not cheap, such as a large number of static synchronous compensators (or statcoms, as they are called) to manage the variability of solar and wind sources. We have had good news about additional natural gas supplies that can be obtained from the Malampaya-Camago complex, which will ease — but not totally eliminate — the import requirements of LNG-fired plants, but that will not be available until the end of this year or the first part of 2027.
There are a great many RE projects in the works, and in general these can be developed more quickly than more conventional thermal power, but most of this capacity will not be available, assuming projects go smoothly, for another three to four years, and then only if support for grid development is prioritized. There are, as I noted above, some projects that will come online sooner, but the amount of new capacity we will see in the next three to six months is on the order of about 300 megawatts. Useful and welcome, of course, but a minor contribution. Likewise, efforts to replace aging and risk-exposed diesel- or oil-based generation systems in island and other isolated areas with more sustainable RE energy storage-generator backup systems will take some time.
If it makes anyone feel any better, my overall impression coming away from the forum was that the entire energy sector is really prioritizing consumers. After all, it is no good for private-sector generators’ and distributors’ business if their customers cannot afford power. There are serious limitations to what can be done, and serious challenges to overcome to build a more resilient, secure and sustainable energy system. But everyone responsible for that knows that, and is desperately eager to get to work on it.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com
