Philippines's energy consumption
The energy consumption landscape in the Philippines showcases a nation striving for greater sustainability while grappling with significant challenges. As a regional leader in renewable energy and energy efficiency policies in Southeast Asia, the Philippines is working to harness its rich renewable resources, including wind, solar, geothermal, and biomass. However, the country remains heavily reliant on imported energy, with imported coal and crude oil making up a substantial majority of its energy needs.
Despite considerable efforts, such as the 2008 Renewable Energy Act aimed at incentivizing renewable energy development, the current energy mix still sees coal as the dominant source of electricity generation. As of 2021, renewables accounted for only 22.4% of total energy production, highlighting a gap between policy ambitions and actual implementation.
Moreover, energy access is broad with 94.8% of the population having electricity, yet this includes many communities with only partial service. Challenges such as funding difficulties and regulatory enforcement hinder progress toward achieving the ambitious goal of 60% energy independence. Moving forward, a more integrated approach that encourages private sector participation and strengthens regulatory frameworks will be crucial for the Philippines to successfully transition to cleaner energy services.
Subject Terms
Philippines's energy consumption
Official Name: Republic of the Philippines.
Summary: The Republic of the Philippines appears as a regional leader in renewable energy and energy efficiency policy developments in southeast Asia. Its regulatory enforcement is, however, insufficient at this time and may threaten its permanence as a model.
The Philippine archipelago is located to the south of Taiwan and the north of Indonesia and consists of 7,107 islands, of which 2,880 are inhabited by about 118.28 million people (as of 2024). Around 18 percent of its population lived below the poverty line in 2021. According to the US Central Intelligence Agency, 94.8 percent of its people had access to electricity in 2022. The government, however, considers the country fully electrified, as almost all the neighborhoods, or barangays (districts or wards—the smallest administrative division in the Philippines), have access to electricity. This reckoning, however, includes all partially electrified communities, as well as those with limited services.
Imported Energy Sources
Because of its relatively small exploitation of indigenous energy, the Philippines relies on imported energy sources. Imported coal accounted for 64.3 percent of the nation's total coal supply in 2021, and imported crude oil accounted for 87.1 percent of all oil. However, the country owned rich renewable energy (RE) resources, including robust wind energy sites, ideal solar conditions, and an abundance of geothermal and biomass resources.
A fuel crisis that erupted in 2008 compelled the Department of Energy (DOE), responsible for overall policy goals in the energy industry, to devise the 2008 Renewable Energy Act. Its aim was to promote the development of RE resources and their commercialization by providing fiscal and nonfiscal incentives to institutions that invest in the sector. These incentives were well received, as testified by the 200 RE projects contracted between the DOE and the private sector in 2009. However, difficulties remained with the implementation of these projects, such as the high risk involved with RE investments and the difficulty in securing funding.
At the consumer level, the Renewable Energy Act encouraged the consumption of RE through a green energy option allowing end users to choose RE power sources. The act also promoted net metering to enable end users to generate their own RE power and sell it to the grid. Finally, it encouraged RE power that is free of value-added tax (VAT, similar to US sales tax). Moreover, all savings from the reduced corporate tax rate were passed through to end users via cheaper electricity rates.
The final goal of the act was to achieve greater energy independence by making the country 60 percent energy self-sufficient. However, as of 2021, the Philippines still relied on coal for 58.5 percent of its electricity generation, while natural gas supplied 17.6 percent. As the nation is geologically active, the Philippines generated 10.1 percent of its total energy generation from geothermal resources. Another 8.7 came from hydropower, 1.2 percent from wind, and lesser amounts from biomass and solar. In total, renewables accounted for 22.4 percent of the nation's total energy.
The First Steps
In February 2011, the DOE took the first steps toward the creation of the Philippines’ first RE market, creating a steering committee to formulate and oversee the establishment of the RE market. Its missions were to issue, trade, and monitor RE certificates, in compliance with the renewable portfolio standard (RPS) introduced by the Renewable Energy Act.
As a market-based policy, the RPS required electricity suppliers to provide a certain amount of their energy supply through RE sources. Under the rules, priority connections to the grid would be given to electricity generated from RE resources. To that extent, the RPS was a major contributor to the growth of the RE portion of the national energy mix.
In 2004, a National Energy Efficiency and Conservation Programme (NEECP) was launched by the Energy Efficiency and Conservation Division, and its implementation was overseen by the DOE. The NEECP is a plan aiming to implement measures to improve EE and energy conservation in all sectors of the Philippine economy by 2014. All government agencies thus have to reduce their energy consumption by 10 percent annually. The NEECP is an essential strategy in rationalizing the country’s demand for petroleum and eventually reducing the impact of rising fuel prices on the economy. However, there were no penalties for failure to meet the target, thus limiting the effectiveness of the program.
Major Energy-Related Changes
In summary, the Philippines has begun the process of making major energy-related changes to move toward more sustainable and cleaner energy services. However, various barriers remain and limit the uptake of RE and EE. It is necessary to overcome those obstacles through a range of strong policy measures providing information on available technologies that raise awareness, that support technical training and capacity building, and, most important, that enforce these regulations. The government adopting an integrated approach will foster stronger participation of the private sector, mainly in project development and implementation.
Bibliography
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