AboitizPower cites complexities in Philippines energy transition

MANILA, Philippines —  Aboitiz Power Corp. said managing the Philippines’ energy transition to greener technologies is faced with complexities, citing the need of balancing it with the aspiration for reliable and affordable electricity.

“Balancing the energy trilemma of reliability, affordability, and sustainability is very complex. You need a secure and reliable electricity to power human progress and you need affordable power for social stability and development,”  AboitizPower chief finance officer Liza Montelibano said.

Montelibano said the country is at a stage of development where “we do need a bespoke pathway and timeline that will still allow for the realization of its fullest human and economic potential.”

Electricity demand in the country is projected to increase by 6.6 percent annually until 2040.

This will require the doubling of supply in 11 years to help support the growth and development of industries, cities and rural communities.

“With that kind of situation, we need all forms of energy to be able to support the requirement,” Montelibano said.

According to the AboitizPower executive, the influx of intermittent sources like solar and wind must ideally be complemented by an affordable solution to renewable baseload, as well as viable low carbon baseload technologies.

She said liquefied natural gas would also have to be a transition fuel in the near term to gradually displace coal and complement the variability of renewables.

“The realistic pace to do transition is underscored by the available technology that allows you to do it in a reliable and affordable way. Given what is available today, we believe what is realistic is a practical and gradual approach that will allow for technology development,” Montelibano said.

“If we really want to hasten the transition, a lot of the support has to go into the development of technology. Once it’s economically viable, I think the rest will fall into place,” she said.

Montelibano said there is also no transition without tranmission as she stressed the critical task of developing the transmission sector.

She called on the need to upgrade the country’s grid to accept more variable renewable energy without compromising the stability of the whole power system.

“We have a history of stranded capacities because the transmission was not there due to long development cycles,” she said.

The Philippines is aiming to expand the share of renewable energy in its power generation mix to 35 percent by 2030 and 50 percent by 2040, with the remainder being allocated to thermal power plants, most of which compose the crucial baseload capacity.

AboitizPower, for its part, has set a 10-year growth strategy of growing its renewable energy assets toward reaching 4,600 megawatts by 2030.

Together with its partners, it currently has the largest and most diversified renewable energy platform in the Philippines in terms of installed capacity under its operational control.

“The next goal for AboitizPower is to further expand its megawatts and to shift its portfolio mix to 50:50 (thermal and renewables) by end-decade, very much aligned to what the energy trilemma is trying to address in terms of security, equity, and sustainability,” Montelibano said.