Energy Transition: Idealism vs. Pragmatism

The recent filing of a case against Department of Energy (DOE) Secretary Raphael Lotilla by Sanlakas and the Power for People Coalition (P4P) for allegedly violating the coal moratorium in favor of AboitizPower raises significant issues.

A Filipino student studying by candlelight during a blackout, depicted in a charcoal sketch. | Illustrator: ASK

This action, however, overlooks critical aspects of the Philippines' current energy situation, where the idealism of a rapid clean energy transition meets the pragmatic need for energy stability.

Sanlakas and P4P allege that Lotilla’s endorsement of the Aboitiz-owned Therma Visayas Inc. (TVI) Unit 3 expansion in Toledo City, Cebu, violated the coal moratorium set during the Duterte administration.

They claim this action favors AboitizPower, where Lotilla was once an independent director.

However, a closer examination reveals significant gaps in these accusations, and a nuanced understanding of the current energy landscape is crucial.

The Disconnect Between Climate Commitments and Energy Stability

While the Philippines has indeed witnessed a rise in renewable energy initiatives, the transition to clean energy is not progressing swiftly enough to meet the nation’s growing energy demands.

Despite aggressive climate commitments, the reality on the ground highlights persistent energy insecurity.

The economic fallout from power outages, such as the PHP 1.5 billion loss incurred by Iloilo City during a three-day blackout in January 2024, underscores the urgent need for a reliable energy supply.

This urgency was further exacerbated during periods of extreme 40° to 42° temperatures this past summer, as the demand for electricity surged, so did the strain on the nation’s grid.

In fact, this situation forced the National Grid Corporation of the Philippines (NGCP) to issue red and yellow alerts, indicating critical and near-critical supply levels. The Department of Energy (DOE) even urged the public to minimize electricity usage to stabilize the grid.

In such a context, the call for an “all-options-on-the-table” strategy, as advocated by AboitizPower’s Chief Corporate Services Officer Carlos Aboitiz, becomes essential. This approach aims to balance traditional energy sources, emerging technologies, and renewable energy to meet the Philippines' growing electricity demand.

"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 stated.

This pragmatic strategy recognizes the need to balance energy security, affordability, and environmental sustainability.

Addressing Allegations Against Secretary Lotilla

The accusations against Secretary Lotilla focus on his endorsement of the Aboitiz-owned Therma Visayas Inc. (TVI) Unit 3 expansion in Cebu, which both Sanlakas and P4P claim violates the coal moratorium.

However, the Department of Energy-Electric Power Industry Management Bureau clarified that the Coal Moratorium Policy issued in December 2020 is not an outright ban.

The policy exempts existing and operational coal-fired power generation facilities, committed power projects, and projects with substantial accomplishments and necessary permits.

The DOE's decision to approve the TVI expansion followed a thorough review and verification process, ensuring compliance with these exemptions. The DOE’s actions align with a strategic framework that balances environmental goals with the practical need to ensure a stable energy supply.

As the country navigates its energy transition, a pragmatic, diversified approach remains essential to meet the dual objectives of sustainability and reliability.

A Path Forward: Diversified Energy Mix

The Philippines is not alone in grappling with the balance between reducing coal dependency and ensuring energy security.

Germany, for instance, recently reactivated coal-fired power plants to address energy shortages caused by reduced gas imports due to geopolitical tensions. This move highlights the practical challenges nations face in transitioning to cleaner energy while maintaining a reliable power supply.

To achieve energy security and meet the country's climate commitments, a diversified energy mix is essential.

Liquefied Natural Gas (LNG) will play a crucial role as a bridge fuel, supporting the integration of more renewable energy sources into the grid.

AboitizPower's investment in LNG and renewable energy projects aligns with this balanced approach, aiming to build substantial new capacity by 2030 and reduce dependence on coal.

While the case against Secretary Lotilla highlights the complexities and challenges in the energy sector, it is crucial to acknowledge the broader context of energy stability and climate commitments.

The Philippines' path to a sustainable energy future requires a pragmatic approach that leverages all available resources, ensuring a reliable and affordable power supply while steadily increasing renewable energy adoption.

The ongoing efforts by the DOE and energy companies like AboitizPower are steps in the right direction toward achieving this delicate balance.