OBLIQUE OBSERVATIONS

By Atty. Gilberto Lauengco, J.D.

“Risk comes from not knowing what you’re doing.” – Warren Buffet

ATTY. GILBERTO LAUENGCO, J.D. is a lawyer, educator, political strategist, government consultant, Lego enthusiast, and the director of CAER Think Tank. He is a Former Vice Chairman of MECO, Special Assistant of NFA and City Administrator among others. His broad experience has molded his unique approach to issues analysis which he calls the oblique observation.

For the past few weeks, occasional brownouts have plagued many areas in the country, including Metro Manila and neighboring provinces. On Tuesday, the Manila Electric Company (MERALCO) announced that rotational power interruptions or brownouts may occur to preserve grid stability and the possibility that the Luzon Grid may be unable to meet peak demand and grid requirements. Despite the onset of the rainy season, the energy supply situation will still be an ongoing problem, both in the short and long term.

The clock is ticking. The Malampaya gas field accounts for roughly 40 percent of electricity needs in the National Capital Region. By 2027, the said gas field will be depleted. Several experts have warned that its depletion will cause 12- to 15-hour rotational brownouts across Luzon. There are several possible oil and gas sites within our exclusive economic zone in the South China Sea. Unfortunately, that area is the site of our current problems with China. It would be difficult to entice investors to pour in funds for natural gas exploration and development in that area because of the perceived risks.

In the short term, Meralco’s chairman said at a press briefing that the country may need more conventional power plants, such as those running on coal, to close the energy supply and demand gap. Currently, coal-fired plants comprise about 47 percent of our energy supply mix. In 2020, our Department of Energy (DOE) issued a moratorium on the development of new coal-fired power plants as the country sought to reduce dependence on coal. With climate change a raging issue, can we reverse our policy and allow the development of more coal-fired plants to solve our energy problems? How about Liquefied Natural Gas (LNG)? LNG is being touted by some energy experts as a transitional energy fuel as we are weaned away from coal. Private companies, however, have been slow in showing interest in LNG and as such, development in this field is still just starting.

What about renewable energy? Powering our entire energy grid from renewable energy is the dream of many. On the face of it, shifting to renewable energy should be a no-brainer. It will be a large part of the answer to climate change. It is clean and fashionable. Once running, it will be cheaper than the current sources. Renewable energy is currently providing 24 percent of our country’s energy mix. Current plans target 35 percent by the 2030s. There are several positives going for the Philippines in terms of renewable energy. First, our country is the second largest producer of geothermal energy. Our agricultural areas and waste areas are a source of biomass and biofuels. We have ramped up solar, wind, and water-sourced energy production. Clearly there is a future in renewable energy in our country.

Unfortunately, renewable energy as it is now, is still faced with many obstacles. First of all, the initial cost of installing renewable energy technology is quite high. As such, the need for financial capital is quite prohibitive at the moment. There are also still some technological and infrastructural barriers that prevent immediate and widespread use of renewable energy, such as battery storage and consistent sustainability. The inability of current technology to meet challenges arising from weather conditions is also an issue to be considered. Cloudy days for solar power, droughts for hydropower, and calm days for wind power are still some of the stumbling blocks.

The full development of renewable energy as our primary energy source is still a work in progress. Meanwhile, the clock is ticking.

What about nuclear power? When I was living in Taiwan a few years ago, I would always marvel at how low my electric bill was even if the air conditioning was turned on for almost the whole day. As I recall, the highest bill I got was roughly the equivalent of one thousand five hundred pesos for one month that summer. What was Taiwan’s secret? At that time, Taiwan was generally reliant on its nuclear power plants to provide a bulk of its energy needs. Taiwan has currently started to wean away from nuclear power. There are, however, factors and realities that have led some policy planners to reverse this process and go back to nuclear.

Nuclear power is technically a clean energy source as it does not produce greenhouse gas emissions during operations. Nuclear energy plants can provide consistent high power output and utilize a small land footprint.

On Tuesday, the DOE established a nuclear energy division, which is tasked to promote, develop, and carry out plans to increase the country’s utilization of nuclear energy. In November 2023, the Philippines and the United States signed a nuclear energy cooperation agreement that would open the doors for US companies to invest in nuclear power projects. Other countries in Asia are again taking tentative but consistent steps in developing nuclear energy.

What about the risks? Almost everyone knows about the risks of nuclear energy. Experts argue that risks can be managed. The real question is, can we afford not to take the risk?

This is my oblique observation.